Business confidence across the UK has hit its highest point since before the EU referendum two years ago according to new data.
A long-running index tracking the outlook of firms from across the country rose further above the long-term average to a reading of 25 per cent in the second quarter, Lloyds Bank said.
The figures tally with other confidence data, with prospects improving following a weak first quarter for the UK economy in which GDP only grew by 0.2 per cent, according to government data.
While firms’ confidence in their own prospects improved, the poll found that the net balance of firms looking to increase investment in the next six months fell by a point to 12 per cent, suggesting considerable uncertainty about the broader macroeconomic environment.
The Lloyds measure, which takes into account the balance of firms expecting higher sales, orders and profits over the next six months, fell to a low of 12 per cent in the aftermath of the Brexit vote, its lowest since the Eurozone crisis.
Uncertainty over the Brexit process remains the biggest risk , with 21 per cent of firms citing it. Over a third of businesses expect a negative impact on business if no trade agreement is reached with the EU. Weaker UK demand was the second-biggest risk.
London firms were the most confident about their prospects, Lloyds found, with an index reading of 31 per cent, while businesses in the South East followed close behind with a reading of 30 per cent.
Mark Burton, London and South East regional managing director at Lloyds Bank Commercial Banking, said the increase in confidence “proves that firms are growing adept at operating in an often uncertain political and economic environment.”
England’s unexpected World Cup run likely added another boost to confidence, Burton added, although skills shortages remain a challenge for almost two-thirds of firms.
