Business confidence hits nine-month high in May as 40% of firms say they’ll hire more staff

By HARVEY DORSET

Updated: 00:01 BST, 30 May 2025

A survey of business owners showed that confidence increased to a nine-month high in May, as financial markets recovered and trade tensions calmed. 

Lloyds bank’s latest Lloyds Business Barometer shows a jump of 11 points to 50 per cent, the highest point since August 2024. 

In April the index, which surveys 1,200 firms with annual turnover above £250,000, had recorded a 10-point drop. 

Hann-Ju Ho, senior economist at Lloyds Commercial Banking, said there had been a ‘sharp increase in economic optimism, reflecting the recovery in financial markets amid the easing of global trade tensions.’

As a result, some 40 per cent of businesses said they expect to increase their staffing levels, up three points from April, while 34 per cent said they expected pay growth of three per cent or higher. 

Feeling better: Construction hit a nine-month business confidence high of 56%

Ho added: ‘Equally as encouraging is the fact that trading prospects, wage expectations and hiring intentions also saw improvements this month. 

‘The positive trends in these metrics are important signals for potential growth and resilience in the business community and the wider economy.’

This boost came after economic optimism also increased, rising 16 points, while trading prospects also grew amid signs of progress in global trade agreements.

The service sector reached its highest confidence point for the past year, passing 54 per cent, while construction hit a nine-month high of 56 per cent. Manufacturing rose two points to 40 per cent.

Retail slumped, however, falling five points to 40 per cent, its lowest point since January.

The rise in business confidence was seen across the UK, with nine of the UK’s twelve regions seeing stronger confidence, most prominently in Northern Ireland, the East Midlands and the South West.

In particular, the East Midlands saw its highest levels of business confidence since 2018, reaching 66 per cent for May.

Paul Kempster, managing director for commercial banking coverage, Lloyds Business and Commercial, said: ‘The jump in business confidence for our regions and nations is encouraging. 

‘It’s great to see that across many metrics, businesses are more hopeful for the future and are backing themselves for success in 2025.

‘As business confidence regains, we are committed to support businesses with a range of financial services to help them to seize opportunities and achieve their growth ambitions.’

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Business confidence hits nine-month high in May as 40% of firms say they’ll hire more staff

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