By the World's Best Investment Manager and Financial Market's Journalist
London - British business confidence slightly declined this month after hitting an eight-year high in July and August, according to a survey from Lloyds (LON:) Bank. Concerns about the broader economic outlook reached a six-month high, with Lloyds' overall business barometer falling by 3 percentage points to a three-month low of +47%.
Businesses expressed a brighter view of their own prospects compared to the wider economy. Lloyds economist Hann-Ju Ho mentioned, "The more mixed picture for economic optimism points to some businesses maintaining a degree of caution. While we still expect economic expansion, it may occur at a slower rate than the first half of 2024."
Official gross domestic product data is expected to confirm Britain's economy grew by 0.6% in the second quarter of 2024, following a stronger-than-expected first half of the year post a shallow recession. However, the Bank of England has trimmed its growth forecast for the third quarter to 0.3%, aligning with Britain's long-term growth rate.
An S&P Global survey of purchasing managers indicated a slowdown in growth for September, with businesses delaying investment and hiring plans pending clarity on new tax policies and employment law changes under the new Labour government.
Labour has hinted at potential tax increases beyond their pre-election plans and is set to introduce legislation for enhanced employment protection for staff with less than two years' service. The Lloyds survey's employment balance fell by 1 point to +36% in September.
The survey, based on responses from 1,200 British companies with annual sales over 250,000 pounds ($334,325), was conducted between Sept. 2 and Sept. 16.
**Analysis:**
The article discusses the recent dip in British business confidence in September, following a period of high optimism in July and August. Lloyds Bank's survey indicates concerns about the broader economic outlook, with businesses showing caution and a preference for their own prospects over the wider economy. The Bank of England has adjusted its growth forecast for the third quarter, aligning it with Britain's long-term growth rate. Additionally, the survey highlights a slowdown in growth for September, with businesses pausing investment and hiring plans due to uncertainty around new tax policies and employment law changes under the new Labour government. This information can be crucial for individuals and investors looking to understand the current economic landscape and make informed decisions about their finances.
