Overall confidence levels among UK companies increased by five points to 22% this month – its highest level for the past six months, according to the latest Lloyds Bank Business Barometer.
The increase moves the level of optimism closer to the long-term average of 28%, The Times has reported.
This is despite the expectation that the Bank of England is to raise interest rates once again this week.
The increase in business confidence was driven by a more optimistic assessment of the wider economy, with almost half of the businesses surveyed expressing greater optimism.
Hann-Ju Ho, a senior economist with Lloyds Bank commercial banking, said: “Business confidence continues to improve following the December boost.
“Firms are clearly more optimistic about the wider economy and this is driving the increase, helped by precursory signs and other cost pressures may be easing.”
Lloyds monthly survey found that confidence in the services sector grew by seven points to 25%, however confidence in the retail sector fell for a second month in a row to 7% - the lowest level sine February 2021.
