East’s business confidence rises in February

Companies in the region reported higher confidence in their own business prospects month-on-month, up 25 points at 74%. When taken alongside their optimism in the economy, up 42 points to 48%, this gives a headline confidence reading of 61% (vs. 27% in January).

This was the joint-second highest confidence reading of any UK nation or region in February, tied with the North West of England (also 61%) and behind the North East (69%).

A net balance of 38% of businesses in the East also expect to increase staff levels over the next year, up 18 points on last month.

Looking ahead to the next six months, businesses in the region identified their top target areas for growth as evolving their offering, for example by introducing new products or services (46%), entering new markets (45%) and introducing new technology, such as AI and automation (35%).

The Business Barometer, which surveys 1,200 businesses monthly and which has been running since 2002, provides early signals about UK economic trends both regionally and nationwide.

Overall, UK business confidence rose 12 points in February to 49% — its highest level since August 2024.

Firms’ optimism in their own trading prospects increased six points to 57%, while their confidence in the wider economy rose 18 points to 42%.

All four sectors surveyed saw double-digit increases in confidence. The largest improvements were seen in manufacturing, which rose by 13 points to 51%, and construction, which increased by 14 points to 50%. Retail also experienced a significant gain, up 11 points to 51%, and services rose by 10 points to 48%.

Within the services sector, hospitality firms posted a particularly strong rebound in sentiment. Confidence across these sectors reached their highest levels in several months, ranging from four months in services to seven months in manufacturing.

Kirsty Sadler, regional director for the East of England at Lloyds, said: “Confidence continues to build in the East, driven by a stronger economic outlook.

“We’ll continue to support businesses as they work to capitalise on their confidence and make the most of new opportunities – whether that’s launching new products or services, or transforming their operations with new technologies.”

Hann-Ju Ho, Senior Economist, Lloyds Commercial Banking, said: “The rise in business confidence demonstrates the resilience of UK businesses and their ability to navigate challenges, such as rising costs and uncertainty. Increased optimism, along with an expected uplift in trading prospects, is prompting businesses to invest in growing and upskilling their workforce, putting them in a prime position to capitalise on increased demand and drive future growth.

“This chimes with the expectations businesses set out at the beginning of the year, where they predicted a strong start to 2025, with the majority (70%) expecting to see their turnover increase in the year ahead. To sustain this positive momentum, it is important that businesses continue to innovate and adapt, ensuring they remain competitive and resilient to future challenges.”