As Christmas approaches, businesses in London are experiencing a boost in confidence due to declining inflation and reduced expectations of further interest rate hikes in the financial markets.
According to the Lloyds Business Barometer, business confidence in London has risen by three points, reaching 47 percent in October.
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London-based companies have reported an increased belief in their own business prospects, with a remarkable seven-point month-on-month increase, reaching an impressive 56 percent, the highest level across the country.
Paul Evans, the regional director for London at Lloyds Bank Commercial Banking, expressed his optimism, saying, “Another month of above-average confidence will provide a significant boost to the capital’s businesses as they approach the busy Christmas season.” He continued, “It’s evident that companies are already making preparations for the next two months to ensure a strong finish to the year.”
This improved confidence in London is mirrored in other parts of the country, with business confidence increasing by three points to 39 percent, the second-highest level this year.
Firms are indicating greater confidence in the future of the UK economy and their own trading prospects. Inflation is expected to decrease rapidly in the coming months, and the markets currently do not anticipate any further rate hikes from the Bank of England.
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Hann-Ju Ho, a senior economist at Lloyds Bank Commercial Banking, stated, “This month’s business confidence reflects a more positive outlook as we enter the crucial festive period, with trading prospects and economic optimism at their second-highest levels this year.” However, he pointed out that firms are still being cautious in safeguarding their profit margins due to high inflation and wage growth.
The survey also revealed that firms’ pricing expectations have reached a new high in October following a third consecutive monthly increase. It showed that 62 percent of firms plan to raise their prices.
