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South West business confidence falls, according to Business Barometer

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Jo CostinJo CostinBusiness confidence in the South West has fallen 16 points since May to 25 percent, according to the latest Business Barometer from Lloyds Bank Commercial Banking.

Companies in the region report lower confidence in their business prospects at 25 percent and lower economic optimism at 24 percent.

Together, this gives an overall confidence of 25 percent, which is 16 points below last month’s figure of 41 percent.

Companies’ hiring intentions show a net balance of 28 percent of businesses in the region expect to hire more staff during the next year, down six points on last month.

Nationally, overall confidence fell six points to 29 percent, as firms’ optimism about the economy dipped, weighing down their confidence in their own business prospects.

The Business Barometer questions 1,200 businesses monthly and provides early signals about UK economic trends both regionally and nationwide.

Joanna Costin, regional director for the South West at Lloyds Bank Commercial Banking, said: “Continued uncertainty over factors including interest rates and future trading relationships is weighing heavy on companies’ confidence in their own prospects.

“Meanwhile, falling optimism about the economy overall is also dragging down business confidence across the UK.

“But the fact that these concerns are having a more muted impact on firms’ plans to hire more staff suggests that they are actually more resilient than the headlines suggest.

“As we gain more clarity regarding our economic future over the coming months, we expect to see businesses become more willing to invest in growth, and confidence levels to rise accordingly.”

Across the region, a net balance of 11 percent of businesses say they feel the UK’s exit from the European Union is having a positive impact on their expectations for business activity.

"This contrasts with a net balance of three percent who felt it was having a negative impact a month ago.

Meanwhile, a net balance of 55 percent of companies in the region expect the Bank of England to increase interest rates this year, with the average firm indicating that raising rates to 1.5 per cent would have a significant negative impact on their business.