LONDON (Reuters) – British business confidence fell to a 2024 low in December but employers were slightly more optimistic about the broader economy, according to a survey published on Monday, while separate data showed a rise in employment and wages before Christmas. .
The Lloyd's (LON:) Bank Business Barometer of business confidence fell two points to 39%, still above its long-term average of 29%.
The decline has extended to a decline since the summer, said Han Ju Ho, chief economist at Lloyds Bank Commercial Banking.
“The main difference in this month's results is that the decline in confidence is driven by businesses' trade prospects,” he said. “However, there has been more positivity regarding the broader economy, and going into 2025, this offers some hope if businesses continue to feel confident about the economy.”
The British economy contracted in September and October – the first consecutive monthly decline in output since the Covid-19 pandemic – with employers worried about the new government's first budget announced on October 30.
The Bank of England last week forecast zero GDP growth in the final quarter of 2024, but kept interest rates unchanged while awaiting more clarity on the impact of budget tax hikes on employers on inflation.
Lloyd's measure of price intentions rose slightly in December and remained well above the long-term average.
A separate survey indicated that the labor market is regaining some momentum in the run-up to the Christmas holidays.
Online jobs website Adzuna said its measure of growth in job openings rose by the most in 2024 so far in November, up 2.3% from October, driven in part by the logistics sector.
Average salaries reported in Adzuna last month rose 6.5% from a year earlier, the largest increase since April 2021.
Official data last week showed unexpectedly rapid wage growth across the economy at 5.2%, well above the rate of around 3% that the Bank of England sees as consistent with stable inflation.
However, Andrew Hunter, co-founder of Adzuna, said employment trends are likely to soon reflect the impact of the budget as well as the slowdown in the economy.
“We're seeing a very competitive hiring landscape right now,” Hunter said. “However, we expect the broader macroeconomic environment to begin to impact employment numbers early next year.”
