Published by Global Banking & Finance Review®
Posted on January 30, 2026
2 min readLast updated: January 30, 2026
Add as preferred source on GoogleUK business confidence fell in January as global economic outlook darkened. Despite this, hiring and wage growth expectations improved, indicating resilience.
LONDON, Jan 30 (Reuters) - British business confidence has weakened this month after executives' view of the global economic outlook declined to its darkest in a year, a survey by Lloyds showed on Friday.
Lloyds' business barometer slipped to a net balance of +44% in January from +47% in December, driven by a 14-point drop in businesses' net economic optimism to a one-year low of +28%.
During the January 5 to January 20 survey period, President Donald Trump threatened to impose tariffs on Britain and other European countries which opposed his efforts to bring Greenland under U.S. control.
However, businesses' expectations for their own activity rose by 7 points to a three-month high of +59%, mirroring an upturn in other surveys such as last week's S&P Purchasing Managers' Index for January .
Hiring plans strengthened for the first time in three months and wage growth expectation also rose. Just over one in five firms expected salaries to grow by 4% or more, the largest proportion in five months.
"Firms are reporting confidence in their trading prospects at the start of the year, despite a slight softening of wider economic optimism. This points to businesses' ability to manage external risks and a focus on growth opportunities," Hann-Ju Ho, senior economist at Lloyds Commercial Banking, said.
Business confidence is stronger than a year ago and above its long-run average of +30%, Lloyds said, though it is below levels seen in the middle of the year, before concerns about renewed tax rises in finance minister Rachel Reeves' annual budget began to weigh on sentiment.
The survey was based on responses from 1,200 businesses with annual sales of at least 250,000 pounds ($343,750).
$1 = 0.7273 pounds)
(Reporting by David Milliken, editing by Andy Bruce)
Business confidence refers to the level of optimism or pessimism that business leaders feel about the overall state of the economy and their own company's future performance.
Wage growth is the increase in the average pay that workers receive over time, often influenced by factors such as inflation, demand for labor, and economic conditions.
Economic optimism is a positive outlook on the economy's future performance, often reflected in consumer spending, business investment, and overall economic growth.
Hiring expectation refers to the anticipated changes in employment levels within a company or industry, indicating whether businesses plan to increase or decrease their workforce.
Explore more articles in the Finance category
