LONDON (Reuters) – British businesses were their most confident this month since May 2022 and pricing expectations, which are being watched by the Bank of England as it grapples with high inflation, cooled to a six-month low, a survey showed on Friday.
The Lloyds Bank Business Barometer rose in March by 11 points to 32%, helped by rising optimism about the outlook for the economy.
The survey added to other signs that have suggested Britain could sidestep a recession that many forecasters previously thought was highly likely.
Wage expectations – which are also watched closely by the BoE – strengthened slightly in March but Lloyds said it detected tentative signals that they had peaked from last year’s highs.
“Business confidence has seen a surge this month with economic optimism and trading prospects bolstering firms,” said Hann-Ju Ho, senior economist at Lloyds Bank Commercial Banking.
“With hiring intentions improving, we may see employment growth picking up in the coming months. Tentative signs of easing wage pressures suggest that businesses’ difficulties in finding staff may have started to ease.”
The S&P Global/CIPS surveys of businesses published last week showed Britain’s private sector expanded in March, although more slowly than in February.
The BoE said earlier this month that it expects Britain’s economy to expand slightly in the second quarter, an upgrade from its forecast in February for a 0.4% drop. It left its forecast of a 0.1% decline in the first quarter unchanged.
(Reporting by Andy Bruce; Editing by William Schomberg)
