People are seen walking along the south bank of the River Thames in the City of London’s financial district, London, Britain, March 19, 2021. REUTERS/Henry Nicholls/File Photo
LONDON, Aug 31 (Reuters) – Confidence among British businesses fell to its lowest level since March 2021 as companies worried about faster inflation, a survey published on Wednesday showed payment pressures had eased after a recent rise.
Lloyds Bank’s monthly business barometer fell to 16% in July from 25% in August, with companies more concerned about rising prices than an economic slowdown.
Han-Ju Ho, senior economist at Lloyd’s Bank Commercial Banking, said: “Business confidence has declined for the third consecutive month as companies continue to face economic challenges and inflation worsens.
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Wage and price pressures remained high, but there were some bright spots as demand for workers increased and companies were less concerned about labor and the coronavirus pandemic, he said.
With 38 percent of firms expected to increase headcount in the coming year, the perception of increasing pay by at least 3 percent fell slightly to 26 percent from 28 percent in July.
The Bank of England is keeping a close eye on wage pressures as it considers how much interest rate hikes are needed to address concerns that recent 40-year high inflation could fundamentally change the public’s long-term inflation assessment.
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Writing by William Schomberg; Editing by David Milliken
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