Jessica Fino 31 Aug 2017 02:44pm

Business confidence falls to year low

Business confidence has fallen to its lowest level in 12 months, particularly among consumer-facing businesses

Confidence among the 200 UK companies surveyed fell by 13 points to 17% in August, according to Lloyds Bank’s business barometer.

Meanwhile, economic optimism fell from 17% to 5%, the lowest level since June last year and the second lowest in five years.

However, Lloyds said that the number of firms planning to raise their headcount over the next 12 months remained at 33%, while 6% plan to reduce staff numbers.

Hann-Ju Ho, senior economist for Lloyds Bank commercial banking, said, “The August report shows that overall business confidence has fallen to the lowest level for 12 months, with sentiment weakest among consumer-facing firms.

“While confidence overall is now just under the long term average, firms’ hiring plans remain robust.”

The report also pointed out that the percentage of companies reporting higher margins rose five points to 15%, but the proportion of those reporting lower margins also increased by five points to 23%.

ICAEW also reported this month that business confidence had taken a major knock in the past three months, as a result of the snap general election, the subsequent hung parliament and the uncertain outcome of Brexit negotiations.