British firms have been most confident in four years, planning wage growth – Lloyds

LONDON (Reuters) – UK business confidence soared to its highest level in more than four years in August and wage growth was the strongest since 2018, according to a poll published Tuesday by Lloyds Bank.

In addition to signs of a recovery in the UK economy after last year’s coronavirus crash, Lloyds said its monthly business barometer rose 6 percentage points to + 36%, the highest since April 2017.

Business optimism also rose by six percentage points after a slump in July when many companies faced staff shortages caused by the spread of the delta variant of the coronavirus and the strict self-isolation rules that have since been relaxed.

“The staff shortage remains a challenge, but as the economy moves back to pre-pandemic levels, we can be optimistic that the momentum of business confidence and economic optimism can be sustained over the coming months,” said Lloyds economist Hann- Ju Ho.

More than a third of companies forecast that they would offer their employees pay increases of at least 2% over the next 12 months, and 17% expected wage increases of over 3%, the highest since Lloyds asked about pay increases in 2018.

The Bank of England is closely monitoring wage growth to see how persistent a recent spike in inflation will prove.

According to Lloyds, 44% of the companies surveyed expected a price increase, the highest level since December 2017.

The survey is based on a survey of 1,200 companies that was conducted between August 2nd and 16th.