According to the latest Business Barometer from Lloyds Bank Commercial Banking, overall business confidence - measured as an average of economic optimism and business prospects, - remains unchanged at 29% in July.

The Business Barometer details that the net balance of firms expecting stronger trading prospects in the coming year fell to 34%; consistent with quarterly economic growth of 0.3%. Meanwhile, economic optimism in regards to the wider economy rose to 25%; lower than at the start of the year.

71% of firms are expecting the Bank of England to raise rates this year, with 23% stating official interest rates at 1% would have a “significantly negative” impact on their business. 30% of firms also expect to increase their staff levels in the coming year, while there are also high pay growth expectations in industries with strongly anticipated employment growth; particularly construction.

In regards to Brexit, 31% of firms believed leaving the EU is having a positive impact on their business activity, with 28% believing it was having a negative effect.

Overall confidence was strongest in the construction sector (48%), followed by manufacturing (38%); while transport and communication (28%) and the other services sector (24%) lagged behind. Regionally, the West Midlands (49%) and London (47%) saw the strongest business confidence, with Scotland (17%), Wales (17%) and the East of England (12%) seeing the lowest.

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