London Tops UK for Business Confidence in February Despite Monthly Dip

London recorded the highest level of business confidence in the UK in February, even as sentiment in the capital eased compared with the previous month, according to the latest Business Barometer from Lloyds.

Firms in London reported a 10 point drop in confidence in their own business prospects, falling to 71 percent. Optimism in the wider economy also declined by eight points to 47 percent. Combined, this produced a headline confidence reading of 59 percent, down from 68 percent in January.

Despite the decline, London still outperformed every other UK region and nation in February. The North West and Northern Ireland both recorded overall confidence levels of 58 percent, placing them just behind the capital.

The survey, which polls around 1,200 businesses each month and has been running since 2002, is widely used as an early indicator of regional and national economic trends. It provides insight into how firms are assessing their own trading prospects and the broader economic environment.

Looking ahead to the next six months, London businesses signalled a clear focus on growth and innovation. More than half of firms, 54 percent, said they plan to introduce new technology such as artificial intelligence or automation. Around 45 percent intend to invest in sustainability initiatives, while 40 percent are aiming to evolve their offerings through new products or services.

At a national level, overall UK business confidence remained unchanged at 44 percent. Confidence in individual trading prospects fell six points to 53 percent, while optimism about the wider economy rose eight points to 36 percent.

Sector data showed diverging trends. Construction saw a notable rise in confidence, up 14 points to 60 percent, while manufacturing increased by five points to 37 percent. In contrast, retail and service sector confidence edged lower, down two and three points respectively.

Kirsty Sadler, regional director for London at Lloyds, said that although there had been a monthly dip, firms across the capital remain focused on expansion. She highlighted technology adoption and product innovation as central themes for businesses seeking to grow in a competitive environment.

Hann Ju Ho, senior economist at Lloyds Commercial Banking, said the rebound in wider economic optimism was encouraging. He noted that most survey responses were collected after the Bank of England’s February decision to hold interest rates steady. That decision signalled the possibility of future easing, which may have helped ease concerns around borrowing costs and wider cost pressures.

However, pricing expectations rose to a six month high, suggesting some firms may be preparing to rebuild margins in 2026. The data reflects a cautious but forward looking business environment, with London continuing to lead regional confidence even amid broader economic uncertainty.