Business confidence in London fell eight points during September to 44% – but remained the highest level of all UK regions and nations for a second month in a row – according to the latest Business Barometer from Lloyds Bank Commercial Banking.

Companies in the capital reported lower confidence in their own business prospects month-on-month, down seven points at 49%. When taken alongside their optimism in the economy, also down seven points to 39%, this gives a headline confidence reading of 44%.

London businesses identified their top target areas for growth in the next six months as investing in their team (40%), introducing new technology (35%) and breaking into new markets (33%).

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

A net balance of 33% of businesses in the region expect to increase staff levels over the next year, down three points on last month.

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Overall UK business confidence fell five points in September from 41% to 36%. Firms’ outlook on their own trading prospects remained strong at 41% despite a five-point drop on last month, and their optimism in the UK economy also remained robust at 30%, down by seven points on August’s reading.

Businesses hiring intentions remained upbeat with 26% of firms reporting plans to increase their staff levels over the next year, down five points on last month.

After London reporting the highest levels of confidence, firms in Yorkshire reported the second highest reading at 40% (up eight points month-on-month), followed by those in the North West at 38% (up four points month on month).
The fall in business confidence this month centred around the retail and services sectors, following strong sentiment in August. Retail confidence fell to 32% (down 12 points) dragged down in particular by trading prospects, while services confidence declined to 36% (down eight points). Construction confidence also fell to 36% (down eight points). However, manufacturing was stronger, with confidence rising to a three month high of 36% (up six points).