UK business confidence levels fell by 26 points to 6% in the past month, according to the latest Business Barometer from Lloyds Bank Commercial Banking. The survey was conducted in the week after the EU referendum – overall confidence fell to the lowest level for over four years but remained above the lows seen during the global financial crisis.
Despite this general shift downwards there are some positive signs. Although confidence and margins declined overall, they held up relatively well in the “industrial” sector, likely affected by the recent fall in the value of the pound.
The results suggest that the opposite was true in “consumer services”, as the weaker pound is expected to raise import prices, while the “business and other services” sector were somewhere in the middle. Overall confidence in the “industrial” sector moved down to 44% from 61%, but it outperformed the “business and other service” sector (down to ‑1% from 25%) and “consumer services” (drop to ‑13% from 19%).
Hiring plans have remained surprisingly resilient in the face of the falling confidence. The net balance of firms expecting to raise their staffing levels in the coming year increased to 26% from 24%. The proportion of companies looking to raise their headcount rose to 38%.