Optimism fell across key indicators in Lloyds Bank barometer despite rising hiring expectations
Keir Starmer has previously namechecked Lloyds Bank business barometer surveys(Image: Carl Court/PA Wire)
Business confidence declined once more at the beginning of the year, according to a tracker regularly referenced by Keir Starmer and Rachel Reeves, delivering a setback to the government’s aspirations of boosting the UK economy ahead of challenging elections in May.
Starmer and Reeves have repeatedly highlighted the Lloyds Bank business barometer when discussing executives’ faith in growth strategies, with recent figures demonstrating stronger confidence levels than alternative surveys.
However, the latest data released by Lloyds Bank revealed business confidence slipping across both primary indicators.
The rating for confidence in people’s own companies decreased by three points to 44 per cent in January, the survey demonstrated. Participants were also more pessimistic about the broader UK economy, with sentiment declining by nine points to a measurement of 53 per cent, as reported by City AM.
The survey, which gathered opinions from approximately 1,200 major companies, did indicate recruitment expectations increasing.
The net balance for employment rose for the first time in three months as more than half of businesses stated they intended to expand their workforce.
One fifth of enterprises anticipated wages to increase by more than four per cent this year, researchers also revealed.
“Firms are reporting confidence in their trading prospects at the start of the year, despite a slight softening of wider economic optimism.,” Hann-Ju Ho, senior economist at Lloyds Bank, said. “This points to businesses’ ability to manage external risks and a focus on growth opportunities.
“The first rise in confidence in the services sector in seven months is encouraging given the sector’s central role in supporting UK economic activity.”
The new data delivers a setback to the government with months remaining until pivotal local elections in May that will gauge voters’ backing for Labour.
The party is lagging behind both Reform and the Tories in national polling, with the government’s core growth mission poised to fall short as projections for this year indicate the UK economy will expand at a more sluggish rate than in 2025.
Figures published by the Office for National Statistics (ONS) on Thursday highlighted more encouraging patterns across enterprises throughout the nation.
The number of companies added to a business register reached 71,935 between October and December 2025, representing a rise of 10 per cent compared to the corresponding quarter the previous year.
There was also a reduced decline in the number of business closures, according to researchers.
Transport and communication sectors were identified as the areas experiencing the most substantial increases in business launches.
![Heathrow has said passenger numbers were 60% lower in November than before the coronavirus pandemic and there were “high cancellations” among business travellers concerned about being trapped overseas for Christmas as Omicron spreads. The UK’s largest airport said the government’s travel restrictions had dealt a fresh blow to travel confidence and predicted it was likely to take several years for passenger numbers to return to pre-pandemic levels. This week ministers said passengers arriving in the UK would have to take a pre-departure Covid test, as well as a post-flight test, because of fears about the spread of the new variant. “[The] high level of cancellations by business travellers concerned about being trapped overseas because of pre-departure testing shows the potential harm to the economy of travel restrictions,” the airport said in an update. Heathrow said the drop in traveller confidence owing to the new travel restrictions had negated the benefit of reopening the all-important corridor to North America for business and holiday travel last month. Eleven African countries have been added to the government’s red list, requiring travellers to quarantine before reuniting with families. “By allowing Brits to isolate at home, ministers can make sure they are reunited with their loved ones this Christmas,” said John Holland-Kaye, the chief executive of Heathrow. “It would send a strong signal that restrictions on travel will be removed as soon as safely possible to give passengers the confidence to book for 2022, opening up thousands of new jobs for local people at Heathrow. Let’s reunite families for Christmas.” Heathrow said that if the government could safely signal that restrictions would be lifted soon, then employers at Heathrow would have the confidence to hire thousands of staff in anticipation of a boost in business next summer. The airport is expecting a slow start to 2022, finishing next year with about 45 million passengers – just over half of pre-pandemic levels. This week Tui, Europe’s largest package holiday operator, said it expected bookings for next summer to bounce back to 2019 levels. However, Heathrow said on Friday not to expect the aviation industry to recover for several years. “We do not expect that international travel will recover to 2019 levels until at least all travel restrictions (including testing) are removed from all the markets that we serve, at both ends of the route, and there is no risk of new restrictions, such as quarantine, being imposed,” the airport said.](https://wordupnews.com/wp-content/uploads/2026/02/shutterstock_1100012546-scaled-400x240.jpg)
![Heathrow has said passenger numbers were 60% lower in November than before the coronavirus pandemic and there were “high cancellations” among business travellers concerned about being trapped overseas for Christmas as Omicron spreads. The UK’s largest airport said the government’s travel restrictions had dealt a fresh blow to travel confidence and predicted it was likely to take several years for passenger numbers to return to pre-pandemic levels. This week ministers said passengers arriving in the UK would have to take a pre-departure Covid test, as well as a post-flight test, because of fears about the spread of the new variant. “[The] high level of cancellations by business travellers concerned about being trapped overseas because of pre-departure testing shows the potential harm to the economy of travel restrictions,” the airport said in an update. Heathrow said the drop in traveller confidence owing to the new travel restrictions had negated the benefit of reopening the all-important corridor to North America for business and holiday travel last month. Eleven African countries have been added to the government’s red list, requiring travellers to quarantine before reuniting with families. “By allowing Brits to isolate at home, ministers can make sure they are reunited with their loved ones this Christmas,” said John Holland-Kaye, the chief executive of Heathrow. “It would send a strong signal that restrictions on travel will be removed as soon as safely possible to give passengers the confidence to book for 2022, opening up thousands of new jobs for local people at Heathrow. Let’s reunite families for Christmas.” Heathrow said that if the government could safely signal that restrictions would be lifted soon, then employers at Heathrow would have the confidence to hire thousands of staff in anticipation of a boost in business next summer. The airport is expecting a slow start to 2022, finishing next year with about 45 million passengers – just over half of pre-pandemic levels. This week Tui, Europe’s largest package holiday operator, said it expected bookings for next summer to bounce back to 2019 levels. However, Heathrow said on Friday not to expect the aviation industry to recover for several years. “We do not expect that international travel will recover to 2019 levels until at least all travel restrictions (including testing) are removed from all the markets that we serve, at both ends of the route, and there is no risk of new restrictions, such as quarantine, being imposed,” the airport said.](https://wordupnews.com/wp-content/uploads/2026/02/shutterstock_1100012546-scaled-80x80.jpg)
