(Commonwealth_Europe) Business owners across the UK are starting to feel a little more hopeful this August. It’s not a dramatic turnaround; no one’s throwing a party just yet, but there’s a quiet confidence building. According to the latest Lloyds Business Barometer, overall business confidence has crept up by two points to 54%. That marks four months in a row where things have gradually improved. Even small steps forward feel meaningful after a challenging few years.
What’s interesting is that headlines or big policy moves aren’t driving this optimism. It’s coming from everyday business owners who are tuning out the noise and focusing on what they can actually do. Confidence in their trading prospects jumped five points to 63%, the highest it’s been since 2014. And that’s not because the world suddenly became easier. It’s because many businesses are learning to work smarter, adapt more quickly, and find new ways to grow, even in challenging environments.
Instead of waiting for the economy to recover on its own, people are taking action. They’re trimming the fat, exploring new markets, trying out fresh ideas, and continually improving their performance. It’s a quiet kind of determination, less about bold predictions and more about showing up and making things work.
That said, the wider economic picture still makes people uneasy. Confidence in the broader UK economy dipped slightly, down three points to 44%. It’s not a significant drop, and the number remains well above the historical average. However, it’s a reminder that while business owners might be optimistic about their path, they remain wary about what’s happening around them. Cost of living pressures, global instability, and political uncertainty still weigh on their minds.
One of the clearest signs of change this month is in how businesses are approaching wages. After a long stretch of holding steady, more companies are planning to raise pay. Nearly 40% now expect to increase salaries by 3% or more. Around a quarter are planning 4% raises, and 12% are thinking about going even higher. It’s not just generosity; it’s necessity. In a tight job market, keeping your best people means making sure they feel valued, especially with everyday costs going up.
Despite those added pressures, most companies aren’t pulling back on hiring. In fact, 62% say they plan to grow their teams over the next year. Only 12% expect to cut staff. And encouragingly, the vast majority, 83%, say rising employment expenses won’t stop them from bringing in new talent. It’s a strong sign that businesses are thinking long-term and backing themselves to keep growing.
Pricing, too, remains a delicate balance. With input costs still high, 67% of businesses expect to raise their prices over the next year. Only 2% say they’ll lower them. It’s not ideal for companies or their customers, but it’s often a necessary step to maintain sustainability. Nowadays, most companies have become adept at managing this delicate balance, striving to safeguard their profit margins without jeopardizing the loyalty of cost-conscious consumers.
When you break it down by industry, the story varies. Manufacturing had a standout month, with confidence jumping 14 points to 62%, its best reading in a decade. Retail wasn’t far behind, rising 13 points to 57%. But it wasn’t all good news. Construction saw confidence drop five points to 40%, while the service sector, spanning everything from hospitality to finance, slipped eight points to 53%.
The mood also varies across the country. London, the East of England, and the West Midlands saw confidence improve. Wales, on the other hand, experienced a sharp 13-point drop. Still, Welsh businesses remain among the most optimistic in the UK, suggesting the dip might be more about short-term bumps than long-term trouble.
What this all adds up to is a business landscape that’s quietly moving forward. The business landscape does face challenges, and it is far from ideal. However, many business owners have given up on waiting for ideal circumstances. They’re hiring, investing, adapting, and doing what they can to keep pushing ahead.
This isn’t the kind of confidence that makes bold headlines. It’s quieter, more grounded. It lives in small decisions: a new hire, a wage raise, an extra hour staying open, a conversation with a customer about why prices had to go up. It’s the kind of confidence that builds slowly but can carry a business, and maybe even an economy, through whatever comes next.
