// Business confidence improves for third consecutive month
// The figures remained well below the long-term historical average
// Business remain cautious as the Covid-19 pandemic continues to affect trading
New research has suggested that business confidence in the UK has improved for a third month running.
Despite the positive outlook, business remain cautious as the Covid-19 pandemic continues to affect trading since reopenings in June.
According to the latest Lloyds Bank Business Barometer, businesses’ confidence improved for the third consecutive month in August but remained well below the long-term historical average.
Trading prospects for the next 12 months increased by nine per cent to -14 per cent, the largest monthly increase for three years, while economic confidence also improved to -14 per cent.
The pandemic had a negative impact on demand at 62 per cent of firms, down from 66 per cent in July.
The retail sector had a higher percentage of firms reporting a negative impact on demand at 64 per cent.
Meanwhile, a third of businesses said they had no employees currently furloughed.
A further 18 per cent of firms are still using the Coronavirus Job Retention Scheme and expect to retain all staff.
“With business confidence sitting well below the long-term average, and official data for the second quarter confirming the UK re-entered recession, the shape of any economic recovery remains highly uncertain,” Lloyds Bank Commercial Banking senior economist Hann-Ju Ho said.
“Nevertheless, it is encouraging to see gradual improvements in trading prospects and economic optimism, albeit from a low base, which will hopefully continue over the coming months.”