UK business confidence experienced a significant increase in May, reaching its highest level since August 2022, primarily due to a recovery in global financial markets and a reduction in trade tensions. The Lloyds Bank business barometer indicated a rise to 50% from 39% in April, with many firms reporting improved trading prospects and intentions for hiring. The data reflects positive sentiment in the wake of a pause on tariffs by the U.S. and stronger-than-expected economic growth, alongside rising inflation figures and an upgraded growth forecast from the IMF.
The rebound in business confidence suggests that firms might be in a stronger position for the next quarter, driven by a sharp increase in economic optimism.
The survey showed improvements in trading prospects and hiring intentions, with a third of businesses planning pay rises of 3% or more.
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