Market Analysis

British businesses are experiencing their highest level of confidence in eight years, with hiring plans reaching their strongest point since 2017, according to a survey released on Friday, May 31. This survey adds to the indicators of economic recovery as a national election approaches.

The Lloyds Bank Business Barometer increased by eight points to 50 percent in May, its highest level since November 2015. This boost in confidence is attributed to companies' optimism about their future prospects, spurred by a decline in inflation and rising expectations of lower interest rates.

Confidence in the broader economy has reached its highest point since September 2021.

However, in a sign of ongoing inflation pressures that the Bank of England is monitoring as it deliberates on rate cuts, more businesses reported plans to raise prices for the second consecutive month.

The British economy emerged from a brief and shallow recession in early 2024. However, this economic momentum has not yet resulted in increased support for Prime Minister Rishi Sunak’s Conservative Party in the lead-up to the July 4 election.

A separate survey by the Recruitment and Employment Confederation, covering the three months ending in April, also indicated a rise in employer confidence. Employers were the most optimistic about the economic outlook in two years, with significant increases in investment and hiring intentions.

Paraphrasing text from "Reuters" all rights reserved by the original author.