According to a new survey, UK business confidence has reached highs unparalleled in recent years, with economic optimism continuing to grow.
The latest Lloyds Bank Business Barometer has recorded a record growth in business confidence, increasing by six points to 36 per cent.
This means that business confidence in the UK has reached its highest level since April 2017, encouraged by the removal of lockdown restrictions, the relaxing of self-isolation rules, and the acceleration of vaccination rollout, with almost 90 per cent of over 16s (88 per cent) having received a first vaccine dose.
Not only this, but economic optimism rose by 6 points to 38 per cent, which is the first rise in three months, offsetting the dip in July.
Pay growth prospects remain strong as salaries are expected to rise and reach a three-year peak, with businesses expecting an average pay growth of at least 2 per cent over the next 12 months.
This has been reflected recently with a growing number of companies offering a number of rewards or increased pay to try and fill the labour shortage across the UK, which has been blamed on both the effect of Covid and post-Brexit immigration policies.
The Lloyds Barometer showed that business confidence was widespread across UK regions, with nine out of twelve increasing in confidence.
Notably, there were strong rises in the North West, up 26 points to 64 per cent, at the highest level since the survey sample was expanded in 2018.
Whilst companies remain cautious about inflation and staff shortages, sectors including manufacturing, services and construction all posted greater optimism that recovery is set to continue.
Hann-Ju Ho, Senior Economist at Lloyds Bank Commercial Banking, said:
Business confidence reaching its highest level in over four years tells a positive story about the country’s economic recovery. This confidence is driven by the continued success of the vaccine rollout, the removal of lockdown restrictions and adjustments to self-isolation rules.
Staff shortages remain a challenge, but as the economy moves back towards pre-pandemic levels we can be optimistic that the momentum for business confidence and economic optimism can be sustained in the months ahead.