UK business confidence falls in February to lowest level since June 2016 – Lloyds Business Barometer

The latest Lloyds Bank’s Business Barometer shows:

• overall business confidence* falling by 15 points to 4%, the lowest level since June 2016

• manufacturing (11%) and construction firms (19%) confidence levels have increased, outperforming the services sector which fell 18 points to -4%

Last month’s marginal rise in overall business confidence – an average of business prospects and economic optimism – appeared to have ebbed away as overall business confidence fell by 15 points to 4%. This was largely driven by a decrease in economic confidence which fell by 15 points to minus 5%. This measure compares to the level in the June 2016 survey when overall business confidence was 6% and economic confidence was minus 11%, which was conducted in the aftermath of the EU referendum.

The decline in overall confidence in the latest survey reflected falls in both outlook on trading prospects and also broader economic optimism. The net balance of firms expecting stronger trading prospects in the coming year fell by 14 points to 13%, while the economic optimism balance fell by 15 points to 5%, the first negative position since mid-2016.