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Business Barometer
Added: 29/08/2025
Business Barometer
Download the latest Business Barometer for an update on this month’s confidence among UK businesses.
Lloyds Business Barometer: tracking business confidence in a complex world
By Jeavon Lolay, Head of Economics and Market Insight, Lloyds
This month’s Lloyds Business Barometer survey continues to show resilient optimism among UK businesses, an outlook that may appear at odds with some surveys suggesting a more cautious view, although most have shown improvements in recent months.
Having spent over three decades analysing macroeconomic trends and financial markets, I’ve learned that context is everything.
What does the Lloyds Business Barometer measure?
The Barometer provides a monthly snapshot of how businesses are feeling about their own prospects and the wider economy. It captures the sentiment of business leaders and offers timely insights into how businesses across the UK economy are feeling about the future.
Lloyds provides banking services to nearly one million businesses across the UK, giving us a unique vantage point to understand the corporate landscape, from micro-businesses to large corporates, spanning industries and geographies. Our Barometer has been running for over 20 years and enhances our insight by offering a credible, consistent and robust data series that tracks evolving sentiment and emerging trends.
The survey is conducted independently and participants are unaware that it’s commissioned by Lloyds, helping to minimise bias. From a survey panel of 20,000 firms, a different set of 1,200 business owners, company directors and finance leaders each month complete an online questionnaire.
Panel firms are a mix of clients and those which bank elsewhere. Key topics include trading prospects, economic optimism, pricing decisions and hiring trends. For ease of completion and consistency, we ask only for simple directional responses to the questions (for example ‘increase’, ‘decrease’, ‘stay the same’) and calculate net balances for each. This analysis approach provides timely insights on turning points. The headline Business Confidence Index is a composite of the net balances for two key questions: how respondents view their trading prospects in the year ahead and their optimism about the economy compared to three months ago.
Our sample includes businesses with turnovers above £250,000, spanning all sectors and UK regions. The headline UK indices are weighted according to sector, turnover and geography to ensure these are representative of the broader business landscape. We also include retail and public sector organisations which are often excluded from other surveys. While many other surveys focus on confidence in the wider economy or on specific risks like cost pressures, tax burdens and regulatory challenges, our Barometer offers a broader and more nuanced view.
The broader economic and geopolitical context that businesses are facing
It’s important to situate these findings within the wider economic and geopolitical landscape. Globally, the economic environment is more positive than headlines might suggest. Most Western governments are still deploying fiscal stimulus, monetary policy is loosening as interest rates decline, and global financial conditions are buoyant. Regulatory reform agendas are gaining traction, potentially leading to a more business-friendly climate than we’ve seen in the past 15–20 years.
The AI-driven productivity boom is both real and material and the realignment of global supply chains, particularly around and away from the US, is creating new opportunities for agile firms.
Optimism amid uncertainty for UK businesses
Despite geopolitical tensions, cost-of-living pressures and fiscal uncertainty, the fundamentals for many UK businesses are strong. Over the past 18 months, we’ve seen improvements in corporate cash flows, deposits and leverage. Overall indebtedness among households and businesses remains low compared to the past.
Looking at the performance of our Barometer in recent years, it shows a strong correlation with the improvement in broader financial conditions in the UK economy. While the external business environment has undoubtedly been challenging, it is also the case that the broader availability and cost of credit has improved.
Why the Lloyds Business Barometer matters
In periods of economic uncertainty, it may be intuitive to focus on the negatives. However, the data tells a more nuanced story. Businesses are not blind to the challenges, but they are responding to them. They are relatively optimistic not because they ignore the risks, but because they believe in their own ability to adapt and thrive.
One key difference with the Lloyds Business Barometer compared with some other business surveys is that it canvasses leaders’ opinions and expectations, not just current conditions. This means that it offers timely insights on business sentiment or optimism, which can be more resilient or durable than prevailing economic conditions at any particular time.
Business surveys like ours offer a timely read on the economy. Unlike official statistics, which are often published with a lag, surveys offer early signals. However, there is no single, definitive measure of business confidence. Methodologies and the wording of questions vary, and that’s why it’s important to consider a range of indicators to get a well-rounded view.
The Business Barometer report is a proprietary survey of 1,200 companies, produced so you can know the confidence levels among UK businesses every month. It gives you vital insight into emerging economic trends which can help you with forecasting and forward planning.
The report covers a range of standard monthly questions from business activity and economic optimism to staff levels, wages and prices charged.
Regional and sector insights within the report provide an extra tier of information, allowing you to hone-in on specific areas in which your business operates, giving the opportunity to better understand the economic environment relevant to your business sector and location.
The report has capacity to include additional questions on special topics of interest such as the COVID-19 pandemic, Brexit and the Budget. Each month, we’ll keep you abreast of emerging hot topics.
The Business Barometer provides relevant, timely insight into UK business confidence levels, helping them to feel informed and equipped to make decisions and formulate plans.
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