Lloyds (LON:LLOY) Bank's Business Barometer for October 2023 indicates a rise in business confidence to 39%, marking the second-highest reading of the year. This comes as companies continue to implement profit protection strategies in the face of impending high interest rates, wage increase pressures, and anticipated winter energy price hikes.
For the third consecutive month, pricing expectations have reached an annual peak. A significant 62% of firms plan price increases, with only 3% considering cuts. This trend is likely a response to the ongoing inflationary pressures in the economy.
In terms of employment, 48% of companies anticipate an increase in staffing levels, contrasting with the 16% predicting layoffs. Elevated expectations for pay increases persist, reflecting the ongoing pressure on wages due to high inflation.
In a related development, the Bank of England is expected to maintain its current policy stance this week. This would mark its second unchanged decision following a series of fourteen consecutive rate hikes aimed at curbing high inflation. The central bank's steady policy stance suggests that it believes its previous rate hikes are sufficient to manage the current inflationary pressures.
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