The Lloyds Bank Commercial Banking Business Barometer, which surveyed businesses between August 3rd and 17th, revealed a mixed bag.
For example, trading prospects for the next year rose by nine percentage points to -14%, which is the largest monthly increase for three years – economic optimism also improved to -14%.
However, 62% of businesses said that Covid-19 had had a negative impact on demand and of those firms with staff still on furlough, only 18% expect to be able to hold onto all of them.
Hann-Ju Ho, Senior Economist, Lloyds Bank Commercial Banking, said, “With business confidence sitting well below the long-term average, and official data for Q2 confirming the UK re-entered recession, the shape of any economic recovery remains highly uncertain. 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.”
Paul Gordon, Managing Director for SME and Mid Corporates, Lloyds Bank Commercial Banking, added, “Tentative signs of improving sentiment continue and it’s encouraging to see businesses responding to the coronavirus disruption with continued resilience. The Eat Out to Help Out scheme, might be behind the notable improvement of 16 points in hospitality and leisure. While that only takes the subsector reading to -22%, any improvement should be welcomed at this stage and the sector will be hoping the consumer confidence boosts carries on long after the incentive ends.
“If we look regionally, the reinstatement of lockdown measures in the North West and East Midlands doesn’t appear to have dampened spirits and we hope possible future localised lockdowns won’t either. Time will tell how even the return to growth is but we stand by ready to help local employers build back better.”
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