British business confidence remained solid in March as businesses raised expectations for the Bank of England (BOE) to cut interest rates this year.
Overall confidence remained unchanged for the third consecutive month at 42%, indicating the UK economy's continued strength, according to the Lloyd's (LLOY.L) Economic Barometer.
Economic optimism reached 39%, the highest level in more than two years, and wage growth expectations eased for the second month in a row but remained above the long-term average.
Lloyds said official monthly gross domestic product (GDP) data appeared to support these findings, as data for January and February suggested the economy started growing again early this year. He said that.
This comes after concerns about supply chain disruptions decreased compared to the previous month. It is no longer the most worrying factor for businesses; interest rates, inflation, and energy prices have become the most salient issues.
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When asked about their company's trading outlook, companies remained positive, albeit slightly down from last month.
More than half (55%) of those surveyed said they expected output to rise over the next 12 months, while a steady 10% expected activity to slow. As a result, the net trading outlook balance fell by 4 points to 45%.
The research found that the brightest businesses were in the east of England, Wales and the north east.
“A consistent trend is starting to emerge from the Barometer results in recent months,” said Han Joo Ho, senior economist at Lloyds Commercial Bank. “Consistent with the decline in inflation, businesses are gaining confidence in the economy. He said he is hopeful that interest rates will start to fall this year.
“The situation across regions remains mixed, with Wales and the South West seeing the biggest rises. The strongest confidence was reported in the East of England, where confidence rose for the third month in a row. The North East. Although confidence in the department declined slightly, it remained strong in April.
“The second quarter of 2024 is off to a positive start for businesses, with businesses expressing greater confidence in a sustained economic recovery.”
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Manufacturing companies reported increased confidence this month, with scores increasing by 45% (up 4 points), the highest level in three months. Similarly, confidence among businesses in the services sector (42%) and construction sector (41%) also improved, mainly due to increased optimism about the economy.
Retail industry confidence has retreated slightly from the previous month's strong 40%, indicating that confidence in the sector remains fragile. Retail is also more likely to be affected by external factors that other sectors do not face, such as bad weather.
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