Business confidence in the East of England fell by three points during July to 50%, according to the latest Business Barometer from Lloyds.

Companies in the East reported lower confidence in their own business prospects month-on-month, down 11 points at 49%. When taken alongside their optimism in the economy, up five points at 51%, this gives a headline confidence reading of 50% (vs. 53% in June).

Looking ahead to the next six months, businesses in the region identified their top target areas for growth as evolving their offer, for example through new products or services (45%), entering new markets (45%) and investing in their team, for example through training (38%).

The Business Barometer, which surveys 1,200 businesses monthly and which has been running since 2002, provides early signals about UK economic trends both regionally and nationwide.

Overall, UK business confidence increased one point in July to 52% – its highest level since 2015 and the third consecutive monthly increase.

Firms’ optimism in their own trading prospects rose one point to 58%, while their confidence in the wider economy increased two points to 47%

Wales was the most confident UK nation or region for the second month in a row (76%), followed by the North East (73%).

July saw the service sector’s confidence increase by 11 points to 61%, one of the main drivers behind this month’s overall increase in business confidence, indicating strong momentum in the sector. This gain was partially offset by declines in other areas, with retail firms down eight points, manufacturers down four points and the construction sector down six points.

Kirsty Sadler, regional director for the East of England at Lloyds, said: “Although confidence has dipped slightly, the East’s firms remain focused on the areas that will help them grow in the coming months – from entering new markets to investing in learning and development. We’ll continue to be providing our tailored, on-the-ground support to help firms take these steps and achieve their ambitions.”

Hann-Ju Ho, Senior Economist, Lloyds Commercial Banking, said: “This continued upward trend reflects a growing sense of cautious optimism across the UK economy, underpinned by both improved trading prospects and broader economic sentiment. Despite ongoing cost pressures, firms are positioning for growth, particularly in services where hiring and investment plans are accelerating.

“Overall business confidence remains buoyant, with firms well placed to take advantage of opportunities such as new markets, adopting new technology and workforce expansion amid evolving market conditions.”