London businesses were among the most confident of any UK region in September, a new survey showed, with sentiment across the country reaching its highest level since lockdown began in March.
Business confidence in the capital rose nine points during September to minus four per cent, according to Lloyds Business Barometer.
While overall UK confidence improved for a fourth consecutive month to minus 11 per cent, the survey showed the smallest rise in confidence since June as local lockdown measures were introduced in some regions to help control the spread of Covid-19.
“It is encouraging to see a fourth consecutive lift in confidence, reflecting improvements in trading prospects and economic optimism,” said Hann-Ju Ho, senior economist at Lloyds.
“However, with new lockdown restrictions being announced, the UK’s path to economic recovery is uncertain and it remains to be seen how the new measures will impact on business confidence,” he added.
September marked the first time that businesses in London felt optimistic about the economy since March, with economic optimism increasing 15 points to two per cent.
London firms’ confidence in their own business prospects increased month-on-month, although the reading remained in negative territory at minus eight per cent.
“While overall confidence remains in negative territory, it’s encouraging to see an improvement in firms’ outlook towards the economy,” said Paul Evans, regional director for London at Lloyds.
“However, a difficult few months lies ahead,” he continued, “particularly as the end of the furlough scheme looms”
Across the country, the impact of the pandemic on businesses’ operations remained significant, with almost two thirds of businesses reporting that Covid-19 has had a negative impact on demand.
Businesses’ hiring intentions saw a modest improvement in September, but remained firmly in negative territory at minus 16 per cent. Some 37 per cent of firms expect a reduction in employment over the coming year.