The quarterly report, which canvasses the views of more than 2,300 UK firms, shows that business confidence is now at its highest level since 2007, continuing the climb back from the historic lows of 2008.
John Maltby, managing director, Lloyds TSB Commercial said: “Business confidence is on the turn. After such dramatic lows, this revival is a real sign that businesses are genuinely hopeful for the future, and it is clear that many firms now see better sales and profitability on the horizon.
“But it remains a confidence tinged with caution. As long as businesses harbour doubts about the economic climate, they will hold back on investment spend and, while there’s enough momentum behind the recovery to prevent it faltering, it is likely to be a long haul.”
Other factors that have caused firms to keep the brakes on investments spending include weak profits and excess capacity – both reflections that demand remains an issue for many firms.
Trevor Williams, Chief Economist, Wholesale Markets said: “The UK is on the road to recovery, led by improvements in business confidence. Export sales, in particular, have risen strongly, helped by the rebound in global demand as well as the sustained fall in the pound.
“The question now is how this renewed confidence will shape the recovery. History tells us that emerging from recession is not always a smooth ride, and we should not expect the coming months to be easy. However, if confidence holds up, we should avoid the double dip that many have feared.”