British businesses have started the year with far more optimism, according to a new survey showing that confidence hit its highest level in six months in January.
The latest Lloyds Bank Business Barometer suggests that overall confidence among UK companies increased by five points to 22 per cent this month, moving closer to the long-term average of 28 per cent.
Confidence is an important economic indicator and driver of growth, because the more optimistic companies feel, the more likely they are to invest. The Bank of England follows confidence measures closely to gauge when to raise interest rates. The Bank is expected to raise the base costs by half a percentage point on Thursday, which will push the rate to 4 per cent.
The increase in business confidence was driven by a more optimistic assessment of the wider economy, with almost half of the businesses surveyed expressing greater optimism.
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