LONDON (Reuters) – British business confidence grew in October after a drop in September and company bosses plan to boost their prices and their hiring, according to a survey that will feature in the Bank of England’s interest rate discussions this week.
The Lloyds Bank Business Barometer, which surveys around 1,200 companies across the economy and is often cited in the BoE’s quarterly reports on the economy, rose to its second-highest level of 2023 at 39%, up from 36% in September.
“However, our data shows that firms are still safeguarding their profit margins in response to the possibility of interest rates remaining high, wage increase pressures, and the prospect of higher energy prices again this winter,” Hann-Ju Ho, senior economist at Lloyds Bank Commercial Banking, said.
Pricing expectations rose for a third month in a row to hit a new high for 2023 with 62% of firms planning to increase their prices and only 3% planning to reduce them.
Companies expecting to raise their staffing levels rose by three points to 48% compared with 16% that planned job cuts. Pay increase expectations remained high.
The survey was conducted between Oct. 2 and Oct. 16.
The BoE is expected to keep interest rates on hold on Thursday, its second no-change decision in a row after 14 back-to-back increases to fight high inflation.
(Reporting by William Schomberg; editing by David Milliken)