UK firms return to 2007 levels of confidence

BUSINESSES are now more confident than at any point since October 2007, according to Lloyds’ business barometer for June.

The net balance of companies’ confidence, measured by the number of firms with positive outlooks minus the number with negative outlooks, stood at 51 points this month, the highest since before the financial crisis.

Some 53 per cent of businesses suggested that they thought trade would improve in the year ahead, 45 per cent that it would stay largely the same, and only two per cent that it would be worse.

And 53 per cent said that they felt more optimistic about the economy than they did three months ago, with eighteen per cent saying the opposite.

Firms were also optimistic about staff levels and domestic prices. Despite overall negativity about profit margins, pessimism has weakened since the winter. The positive outlook has grown by most in the north of England.

Trevor Williams, chief economist at Lloyds Bank Commercial Banking, said: “Sentiment among Britain’s companies remains positive and suggests that the economic recovery may be becoming more entrenched. Our survey suggests that the pace of growth is likely to increase in the second quarter, with further acceleration possible in the second half of the year”.