Business confidence in London fell 10 points during April to 51%, according to the latest Business Barometer from Lloyds.

Companies in London reported lower confidence in their own trading outlook month-on-month, down seven points at 59%. When taken alongside their optimism in the economy, down 15 points to 42%, this gives a headline confidence reading of 51% (vs. 61% in March).

April’s figures mean that London continues its two-year trend of outstripping the UK overall confidence reading.

Looking ahead to the next six months, London businesses identified their top target areas for growth as evolving their offering, for example by introducing new products or services (42%), introducing new technology, such as AI or automation (42%), and investing in sustainability (40%).

The Business Barometer, which surveys 1,200 businesses monthly and which has been running since 2002, provides early signals about UK economic trends both regionally and nationwide.

Amanda Murphy, CEO for Lloyds Business and Commercial Banking said: “Businesses told us their confidence fell as inflation pressures re-emerged, global uncertainty persisted and costs remained elevated. While sentiment declined, it remained above the long-term average, with nearly two-thirds expecting stronger output in the coming year. “UK businesses are resilient and adept at deploying strategies to defend growth in uncertain conditions. Over the past month, we’ve seen them opt for flexibility wherever possible. They’re building contingency into their short and medium-term plans, rather than expecting a rapid return to normal. Protecting margins has become more important. That means tougher cost scrutiny and a greater focus on balancing growth with profitability.

“In this environment, as with other recent market disruptions, we continue to observe that sustainable success comes from discipline, resilience and clarity about what really drives long term value.”