UK business confidence rose by four points to 53% in August, its highest level since March, as firms became more optimistic about both their own trading prospects and the wider economy, according to the latest Lloyds Business Barometer.

Economic optimism was the strongest driver, rising seven points to 49%, up 18 points since June, while firms’ trading outlook increased two points to 58%, a three-month high. Confidence also improved among domestic businesses, which jumped 10 points to 44%, while internationally exposed firms rose three points to 59%.

Services confidence climbed seven points to 56%, its highest since July 2025, while manufacturing rose eight points to 55%, suggesting stronger demand is feeding through across the economy.

There is also a notable disinflationary element, as the proportion of firms expecting to raise prices over the next year fell three points to 51%, its lowest since 2022 and the third consecutive monthly decline, as businesses reported easing cost pressures and efficiency gains.

Lloyds said the survey showed "a meaningful improvement in UK corporate sentiment", although geopolitical risks and global energy prices "remain potential headwinds".

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