The City of London’s financial district can be seen as people walk along the south bank of the River Thames, London, Britain, March 19, 2021. REUTERS/Henry Nicholls/File Photo
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LONDON, Aug 31 (Reuters) – Confidence among British businesses has fallen to its lowest level since March 2021 as companies worry about fast-rising inflation, according to a survey published on Wednesday, which also showed wage pressures were stabilizing after a recent increase.
Lloyds Bank said its monthly business barometer fell to 16% in August from 25% in July, with companies more concerned about rising prices than the economic slowdown.
“Business confidence fell for the third consecutive month as firms continue to face economic challenges in the period ahead and as inflation concerns intensify,” said Hann-Ju Ho, senior economist at Lloyds Bank Commercial Banking.
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Wage and price pressures remained elevated, but there were some brighter spots as demand for staff held up and firms reported less concern about staffing and the coronavirus pandemic, Ho said.
While 38% of firms expected to increase headcount in the coming year, the proportion thinking of raising wages by at least 3% fell slightly to 26% from 28% in July.
The Bank of England is closely monitoring wage pressures as it considers how much further it needs to raise interest rates to quell the risk that the recent 40-year high level of inflation will fundamentally change the public’s assessment of the long-term path of prices .
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Writing by William Schomberg; editing by David Milliken
Our Standards: The Thomson Reuters Trust Principles.
