UK Business Confidence Ticks Higher In May - Lloyds Banks

• Sentiment among British businesses edged higher in May, except for consumer-facing companies that are most exposed to the growing cost-of-living crunch, a survey showed on Tuesday. The Lloyds Bank Business Barometer rose in May to 38% from 33% in April, its first increase since February, despite worries about a slowing economy. 
• The Lloyds survey brought mixed news on inflation pressures. While the proportion of companies planning to raise prices eased by a percentage point to 57%, pay intentions remained strong. Some 16% of firms intend to raise pay by 4% or more in the coming year - high by the standards of the Lloyds survey. 
• Morale in the construction and manufacturing sectors improved, but in the retail sector, it fell to its lowest since March 2021 when non-essential shops were still shut due to COVID restrictions. 
• "Business confidence improved this month and firms, in general, seem able to rebuild some of their margins through price increases," said Hann-Ju Ho, Senior Economist at Lloyds Bank Commercial Banking. "Consumer-facing industries, such as retail, are not feeling the same confidence uplift amid the widespread reports of a squeeze on household incomes."

(Source: Reuters)