London Economy Surges as Business Confidence Bounces Back in May

London’s Business Scene Gets a Confidence Boost

According to the latest Business Barometer from Lloyds, the capital’s companies are feeling a bit more optimistic than ever. Business confidence in London shot up 10 percentage points last month to 53 %, a jump from 43 % in April. Knowing the streets, people here love a good boost.

Inside the Capital’s Mood

Own trading prospects climbed 8 points to 57 % – a clear sign that the city’s firms are ready to throw their hats in the ring.
When it comes to the overall economy, confidence rose 12 points to 48 %.

Combined, that gives a headline confidence reading of 53 %.

What London Businesses Gonna Do Next

Looking ahead to the next six months, the numbers highlight the top growth priorities:

41 % want to evolve their offerings – new products, new services, you name it.
44 % plan to invest in their team, training included.
41 % are eyeing new technology to stay ahead.
41 % think about entering new markets.

Across the UK

The overall UK picture looks bright too. Confidence saw an 11‑point rise to 50 % – the best level since August 2024. Here’s how it breaks down:

Firms’ trading prospects rose 6 points to 56 %.
Broader economic confidence jumped 16 points to 44 %.
The East Midlands topped the rankings at 66 %, closely followed by the North East at 65 %.
Construction firms hit a nine‑month high with 56 % confidence, while the services sector reached a one‑year high at 54 %.
Manufacturing confidence edged up by 2 points to 40 %. Retail, however, dipped slightly to 40 % – the lowest since January.

Word From the Pros

Kirsty Sadler, regional director for London at Lloyds:

“It’s encouraging to see strong growth in business confidence across the capital this month. The renewed optimism – not only in trading prospects but the wider economy – reflects the ambition, adaptability and forward‑looking mindset that defines London’s business community. We remain committed to supporting local firms as they harness this momentum to innovate, grow, and invest in their future.”

Hann‑Ju Ho, Senior Economist, Lloyds Commercial Banking:

“The rebound in business confidence suggests that firms might be in a stronger position for the next quarter. The rise in confidence is driven by a sharp increase in economic optimism, reflecting the recovery in financial markets and more promising prospects for global trade agreements. Equally encouraging are the improvements in trading prospects, wage expectations and hiring intentions this month. These positive trends are important signals for potential growth and resilience in both the business community and the wider economy.”