UK business confidence falls in August due to Brexit uncertainty

As UK consumers shrugged of any Brexit anxiety in August with an increase in spending, businesses reported a dip in confidence, a survey showed on Wednesday.

The Lloyd’s business barometer, which measures business confidence, fell 13 points in August from July to 16%.

However, August’s morale was higher than in June when the barometer fell to 6% immediately after the UK voted to leave the European Union.

“Our August survey shows a fall in overall confidence, although it remains above the low in June," Hann-Ju Ho, senior economist for Lloyds commercial banking said.

"It is consistent with a slowdown in UK growth prospects in the second half of the year and may reflect a growing expectation for some that a more challenging economic outlook will have a negative impact on their own company prospects. Despite this, hiring plans continue to indicate resilience."

Despite a fall confidence, a third of companies surveyed by the bank said they would increase their staff numbers in the next 12 months, which is the highest level in five months.

The number of companies who reported an improvement in trading prospects fell 22 points to 19%, the lowest level since December 2011. Around 22%, up from 5% in July, said they felt their future prospects were not as positive.

Low business morale reported by Lloyds is a stark contrast to the Gfk consumer confidence index, reported on Wednesday. The index rose by five points to -7 in August, after an initial 11 point fall in July after the Brexit vote, which was its best monthly rise since June 2015.