Confidence among businesses in Kent and the South East took a dip in June as inflationary pressures began to bite.

According to the latest Business Barometer from Lloyds Bank Commercial Banking, confidence fell by two points to 21% this month.

The barometer questions 1,200 businesses monthly, providing early signals about UK economic trends both regionally and nationwide. The overall ‘balance’ of opinion weighs up the percentage of firms that are positive in outlook against those that are negative, with responses weighted to reflect the composition of the economy.

We were far from the only region seeing a dip, with confidence falling everywhere except for the East of England which rose by 17 points to 31%. London saw a big drop of 28 points down to 35%.

Overall UK business confidence fell 10 points during June to 28%. Firms’ optimism in the economy dropped 12 points to 21%, while their outlook on their future trading prospects was down eight points, at 34%. The net balance of businesses planning to create new jobs also decreased, by nine points, to 28%.

Companies in the South East reported lower confidence in their own business prospects month-on-month, down five points at 25%.

When taken alongside their optimism in the economy, down one point to 15%, this gives a headline confidence reading of 21%.

Paul Evans, regional director for the South East at Lloyds Bank Commercial Banking, said: “It’s a tricky time for businesses, with inflation and supply chain challenges disrupting daily operations. With that in mind, it’s encouraging to see firms in the South East remain confident about their prospects.

“Businesses in the region continue to target growth opportunities, including investing in their own teams. We would encourage companies to strengthen their working capital to minimise any further disruption from economic volatility in future.”

Confidence among businesses in the manufacturing and construction sectors fell, bringing them close to the UK all-sector average, at 32% and 30% respectively, reflecting lower optimism in the economy.

Service sector confidence declined to its lowest in a year, at 25%, showing weaknesses in hospitality, though offset by stronger confidence in business services. Confidence in retail businesses edged up this month four points from 27% to 31%.

Hann-Ju Ho, senior economist for Lloyds Bank Commercial Banking, added: “Business confidence declined this month, suggesting that the momentum for growth is moderating. Firms remain broadly positive but face several challenges ahead, including concerns around higher costs and slowing demand. If these trends continue, businesses may have less scope to pass on higher costs to support their margins.”