Modest rise in hiring intentions as business confidence dips

Hiring intentions among UK firms have increased slightly in October, despite a dip in business confidence ahead of tomorrow’s Budget.

The latest Lloyds Bank Business Barometer report, which surveyed 1,200 companies, found 54% of employers expect to grow their headcount in the next 12 months, up from 53% who said the same last month.

One in six (17%) employers think they will reduce their workforce, which is unchanged from the previous month.

The report also showed overall business confidence dropped to its lowest level in three months, falling three percentage points to 44%. However, it still remains higher than the study’s 29% long-term average.

Overall, confidence increased in four out of 12 UK regions, with the highest levels found in the North East, London and North West.

Hann-Ju Ho, senior economist for Lloyds Bank Corporate and Institutional Banking, said: “While overall business confidence dipped in October, it follows a sustained period of significant optimism, and business sentiment remains above historical levels.

“Encouragingly, many businesses remain confident in their own trading prospects, and the increase in hiring intentions suggests more employers want to grow their workforce.”

Meanwhile, the survey, which was carried out between 1 and 15 October, noted that pay growth expectations are still greater than pre-pandemic.

Companies suggested average wage increases in the next 12 months would ease slightly, with fewer than one in three (32%) expecting a growth of 3% or more – a drop for the second consecutive month and the lowest since July 2024.

The proportion anticipating an average pay increase of 4% or more also dropped to 17%, but wage expectations are still above those pre-pandemic.

Ho added: “Businesses’ broader economic outlook continues to reflect this rounded picture, and as they move into the final part of the year, they will look to manage these considerations effectively.”

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