[LONDON] Confidence levels among British employers hit a fresh nine-year high this month as companies became more optimistic about the outlook for the economy, according to a survey published on Monday.
The Lloyds Bank Business Barometer rose by one point to 51 per cent, the highest since November 2015, adding to an 11-point jump in May following a tumble in April when US President Donald Trump announced a big jump in import tariffs, many of which have since been suspended.
The survey’s measure of economic optimism touched a 10-month high, rising by a point after a 16-point increase in May.
Hann-Ju Ho, senior economist at Lloyds Bank Commercial Banking, said a rise in hiring intentions – with 60 per cent of firms expecting higher staffing levels in the coming year – suggested employers were starting to prepare for future growth.
The Bank of England is watching Britain’s jobs market closely as it tries to gauge how much inflation pressure remains in the economy. Governor Andrew Bailey said last week that he saw signs of a slowdown in the labour market, due in part to the government’s tax increase for employers, which began in April.
But the Lloyds survey showed wage growth expectations rose for a second month in a row, with 36 per cent of respondents forecasting average pay increases of 3 per cent or more.
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Separate figures published by jobs website Adzuna showed UK staff vacancies edged down in May from April but rose by 0.5 per cent compared with May last year, the third such increase in a row after more than a year of falls.
“May reinforced the sense that the job market in the UK is gradually regaining its footing,” said Andrew Hunter, co-founder of Adzuna.
The Confederation of British Industry (CBI) said its gauge of expectations among businesses about the economy over the next three months were less negative than in May but remained weak after the tax increase on employers and geopolitical upheaval.
“Companies are still grappling with higher employment costs, cautious spending behaviour on the part of households and increasing global uncertainty,” said Alpesh Paleja, the CBI’s deputy chief economist. REUTERS
