Lloyds – British business confidence recorded its biggest monthly improvement in additional than four years this month. This is reflecting optimism that COVID-19 vaccines will result in economic recovery in 2021, a Lloyds Bank survey showed on Monday.
Lloyds said its monthly business barometer rose by 17 percentage points to -4% in December, its highest since March, before the coronavirus pandemic hit Britain’s economy.
“The news of the vaccine progress has bolstered this month’s confidence figures. Which over offsetting uncertainties around the UK’s new trading relationship with the EU,” Lloyds economist Hann-Ju Ho said.
The improved business sentiment mirrors identical gains among households whose confidence rose this month by the biggest margin in eight years, in line with a survey last week from market researchers GfK.
The immediate economic backdrop is weak. Britain’s economy is heading in the right direction to shrink 11% this year, the foremost since 1709. This is consistent with the Bank of England, while ongoing COVID-19 restrictions may hamper with the growth in early 2021.
Lloyds said 32% of firms it surveyed expected to cut staff next year, and 22% planned to extend numbers. Larger businesses tended to be more upbeat, and also more likely to commit to end pay freezes.
The survey was supported by a poll of 1,200 firms conducted between Nov. 25 and Dec. 10.
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