Confidence in businesses’ own trading prospects rose seven points to 59 per cent, the highest level in three months. In contrast, optimism about the broader UK economy declined to 28 per cent, reflecting ongoing macroeconomic uncertainty.
Hiring plans improved for the first time in three months, with the net balance rising to 41 per cent. Over half of surveyed firms plan to increase headcount, while those expecting job cuts fell to 12 per cent. Wage growth expectations also firmed, with 21 per cent of businesses anticipating salary increases of 4 per cent or more in 2026.
UK business confidence has slipped to 44 per cent in January but stayed well above its long-term average.
Firms reported stronger confidence in their own trading prospects and improved hiring plans, alongside firmer wage expectations.
However, optimism about the wider UK economy softened.
Retail saw modest gains, while London remained the most confident region.
Price pressures remained largely steady. Around 64 per cent of businesses expect to raise prices, up slightly from December, while only 2 per cent plan reductions.
Retail sentiment increased marginally in January, up two points to 49 per cent. Regionally, confidence rose in five of the UK’s twelve regions, led by London and the North West, with London remaining the most confident at 69 per cent.
“Firms are reporting confidence in their trading prospects at the start of the year, despite a slight softening of wider economic optimism. This points to businesses’ ability to manage external risks and a focus on growth opportunities,” Hann-Ju Ho, senior economist, Lloyds Commercial Banking, said in a release.
“It’s encouraging to see businesses start the year with renewed confidence in their ability to deliver for customers, setting themselves up well to capture the growth opportunities ahead. Keeping a close focus on cashflow and making strategic investment decisions will be key to acting quickly as new opportunities emerge,” said Paul Kempster, managing director for Commercial Banking Coverage, Lloyds Business & Commercial.
Fibre2Fashion News Desk (HU)
