UK business confidence edges up, but remains near all-time low

30 Jun 2020

Confidence among UK firms improved in June for the first time in six months, ahead of the latest easing of coronavirus lockdown restrictions.

This is according to the findings of a survey by Lloyds Bank published on Tuesday.

Business confidence in Britain increased by three percentage points to its highest point since March, Reuters reports. That said, it was still deeply negative at -30%, according to the survey.

A slightly smaller number of firms forecast having to lay off employees, 41% compared to May’s figure of 44%, and those planning a freeze in pay also edged down.

According to Hann-Ju Ho, senior economist at Lloyds Bank Commercial Banking: “While the results suggest the economy may be starting to see some improvement, trading conditions remain difficult for most firms as the majority are still experiencing disruption to supply chains.

“Hopefully the recent government announcement of further relaxation of restrictions and the slight easing of social distancing measures will enable more businesses to reach their capacity and resume their usual activities, which we would expect to be reflected in further improvements to optimism next month.”

In addition, confidence among construction companies enjoyed a robust rally of 30 points, along with smaller improvements for manufacturers and retailers. However, services posted a fall as the education and hospitality sectors were still faced with lockdown restrictions.

The Lloyds Bank survey was carried out between June 1 and June 15. This was after non-essential retailers in the UK were allowed to re-open, but before the Prime Minister Boris Johnson said bars and restaurants and other consumer-orientated businesses could open again from July 4.

The PM is set to pledge to “build back better, build back greener, [and] build back faster” on Tuesday, as details of the government’s COVID-19 economic recovery plan are announced.

Boris Johnson will outline plans to bring forward £5bn in capital investment projects, which will include £1.5bn to spend on hospitals, £1bn to build new schools, £900m for “shovel-ready” local projects, and £100m for roads, reports Yahoo Finance.

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