UK business morale down to 2024 but wage growth strong, Reuters survey shows
LONDON (Reuters) – British business confidence fell to its lowest level for 2024 in December but employers were optimistic about the wider economy, according to a survey published on Monday, with separate data showing a pre-Christmas surge in hiring and payrolls. .
Lloyds (LON:) The Bank’s Business Bank confidence rating for companies fell 2 points to 39%, still above its long-term average of 29%.
Hann-Ju Ho, senior economist at Lloyds Bank Commercial Banking, said the fall extended the pullback from the summer.
“The big difference in this month’s results is that the drop in confidence is caused by the trading opportunities of firms,” he said. “However, there was a positive outlook on the wider economy and, going into 2025, this gives hope if companies continue to be confident about the economy.”
Britain’s economy contracted in September and October – the first consecutive monthly contraction since the COVID-19 pandemic – as employers worried about the first new government budget announced on October 30.
The Bank of England last week forecast zero growth in gross domestic product in the last quarter of 2024 but kept interest rates on hold as it awaited further clarification on the inflationary impact of the tax hike on employers.
Lloyds’ gauge of price targets rose slightly in December and remained above its long-term average.
A separate study suggested that the labor market is regaining its momentum as we prepare for the Christmas holidays.
Online jobs website Adzuna said job growth in 2024 was the fastest so far in November, up 2.3% from October, driven in part by the transportation sector.
The average salary advertised in Adzuna last month was up 6.5% from last year, which is the highest figure since April 2021.
Official data last week showed an unexpectedly fast economy-wide wage growth of 5.2%, above the 3% estimate the BoE considers consistent with stable inflation.
However, Andrew Hunter, co-founder of Adzuna, said employment trends will soon reflect the impact of the budget and economic slowdown.
“Right now we’re seeing a very competitive hiring environment,” Hunter said. “However, we expect the broader economic situation to begin to have an impact on employment figures early next year.”
