According to a survey published on Sunday by trade body Make UK and accountants BDO, British companies have expressed the most positive outlook for their trading prospects in 10 months.

The survey also indicated increased hiring plans. However, rising interest rates may lead consumers to reduce their spending.

The survey highlighted that business optimism reached its highest level since August 2022, supported by a decrease in the survey's inflation pressure gauge, which reached its lowest point in almost two years.

Despite a slowdown in output growth, the survey's employment index showed a fifth consecutive monthly increase, with a rise in the number of self-employed and part-time workers. However, manufacturers experienced the lowest output reading since May 2020.

Kaley Crossthwaite, Partner at BDO LLP, noted that while there is hope that the new energy regulator Ofgem's price cap will reduce household energy prices and ease inflation, the recent increase in interest rates and stagnant price growth suggest that this improvement may still be far off.

The Bank of England, aiming to address the highest inflation rate among major advanced economies, is concerned about long-term price pressures in the labor market. It is widely anticipated that the Bank of England will continue to raise interest rates in response. Photo by Eluveitie, Wikimedia commons.