Business confidence has risen to its highest level in ten months as companies become increasingly optimistic about filling staff shortages, according to the latest Lloyds Bank business barometer.
An easing of wage demands from last year’s highs boosted optimism among business leaders that they will be able to recruit staff, according to the survey which covers 1,200 companies with an annual turnover of more than £250,000.
Optimism about the economy improved by 11 points to 23% while trading prospects rose 4 points to 52%. The net balance for the latter rose by its biggest margin in two years.
Wage expectations rose in March, with 26% of businesses expecting to hike pay by 3% or more, up from 23% the previous month. The share of businesses that expect pay growth of 2% or more rose for the second month in a row to 45%.
However, there are signs that the rate of wage growth is slowing down. Anticipated staffing levels rose for a fourth consecutive month, while the share of businesses planning to increase their prices further fell to a six-month low.
Sophie Lund-Yates at Hargreaves Lansdown noted: "There’s a growing belief that businesses are able to recruit staff, which helps keep a ceiling on the wages that need to be offered to fill vacancies. That said, wages are still expected to climb, it’s simply that the rate of growth is anticipated to come off the boil."