Business confidence in London rose 14 points during March to 52%, according to the latest Business Barometer from Lloyds Bank Commercial Banking, driven by a stronger economic outlook.

Companies in London reported higher confidence in their own business prospects month-on-month, up six points at 57%. When taken alongside their optimism in the economy, up 23 points to 47%, this gives a headline confidence reading of 52% (vs. 38% in February).

London businesses identified their top target areas for growth in the next six months as introducing new technology, such as AI or automation (43%), evolving their offering, for example by introducing new products or services (43%), and entering new markets, for example by diversifying into adjacent markets or exporting to new ones (41%).

The Business Barometer, which surveys 1,200 businesses monthly, provides early signals about UK economic trends both regionally and nationwide.

National picture

Overall UK business confidence registered 42% in March, the same as in February, as firms’ confidence in their own trading prospects (49%) held steady, and confidence in the economy strengthened by one point (35%).
 
Yorkshire and the Humber was the most confident UK nation or region in March (60%), followed by the North East (56%). London’s was the third strongest confidence reading in March.

Sector Insights

Services confidence fell 5 points to 40%, the first decline since December. That drop, however, was offset by rises in confidence in the manufacturing, retail and construction sectors.

The gains in manufacturing (up 1 point to 41%) and construction (up 2 points to 40%) were relatively modest and confidence remained below levels seen at the start of 2024. Firms in the retail sector reported improved confidence (up 5 points to 45%), which was the strongest result for over two years.