British business confidence has reached its highest level in six months, buoyed by optimism about the economy and price stability despite recent geopolitical tensions and rising oil costs. According to the latest Lloyds Business Barometer, sentiment increased by four points in August to 53 percent, the strongest level since March, shortly after the outbreak of the US-Iran conflict in late February.

The barometer’s rise reflects companies’ growing confidence in the economy’s resilience amid global uncertainties. Economic sentiment climbed seven points during August, marking an 18-point improvement since June and surpassing the 12-month average of 47 percent. This suggests that businesses are increasingly optimistic about economic growth prospects even as inflation and energy costs remain potential challenges.

Despite an uptick in global oil prices, fewer firms reported plans to raise their own prices this month. The percentage of companies expecting to increase prices has declined over the past three months, indicating that higher energy expenses have not yet translated into broader supply chain or consumer price inflation. Inflation rose to 2.9 percent in July but has generally stayed below forecasts since the spring.

Amanda Murphy, chief executive for Lloyds Business and Commercial Banking, noted that stronger customer demand and improved confidence in their trading outlook are helping businesses focus more on growth and investment rather than merely managing cost pressures. “Easing cost pressures and fewer firms expecting to raise prices in the coming year should allow them to focus less on managing headwinds and more on pursuing growth,” she said.

The upward trend in business confidence is mirrored by consumer sentiment, which has also improved recently. A GfK consumer confidence index reached its highest level in two years during August. Domestic UK companies reported a ten-point rise in confidence, while international firms saw an increase of three points. Global businesses attributed their stronger outlook to higher customer demand, a more stable international environment, and improving financial conditions.

Economic data shows that the UK economy expanded by 0.6 percent in the first quarter of the year, with growth easing to 0.4 percent in the second quarter. The combined indicators suggest a cautiously positive outlook for the British economy as businesses and consumers resume spending and investment activities despite ongoing challenges.

Overall, the latest surveys reflect a business environment that, while still facing uncertainties, is demonstrating greater resilience and optimism about future growth prospects.