Lloyds Report: Business Outlook for 2025 Brighter Than 2024

The UK economy is forecast to grow in 2025, bucking the trend of negative attitudes throughout the last year.

Based on new findings from Lloyds Business Barometer, UK firms are more optimistic about a stronger start to 2025 than they were at the beginning of 2024.

With more than 20 years of continuous surveying of 1,200 businesses since 2002, the Business Barometer provides early warnings about regional and national economic trends in the UK. In a survey of businesses, results indicated a relatively positive view of the wider economy as well as their own trading prospects. Despite signs of uncertainty in the wider environment, trading prospects remained positive.

According to the research, 70% of UK businesses anticipate an increase in turnover in the coming year, up from 62% in December 2023, while almost 75% believe that they will achieve higher profitability. The majority of companies surveyed prioritise revenue and profitability, with a third focusing on employee upskilling.

Hann-Ju Ho, Senior Economist at Lloyds, commented on the positive outlook, saying it’s “exciting” to see businesses with ambitious plans for the coming year and confidence in growth. “Overall, businesses have responded well to the changing external environment.

While the economic outlook has been challenging, the steps firms are taking to grow should put them in a strong position for success in 2025,” he added.

The number of employees on the books of businesses is expected to increase by over half despite a third decline in hiring intentions in four months. Over half of respondents said they planned to expand their workforce, three times more than those who planned to reduce it (17%). 

Even though pay expectations have decreased moderately, they remain elevated compared to four years ago. In spite of this, businesses expecting wage growth of 3% or more fell for the third consecutive month (30%). The proportion of companies expecting pay growth of at least 4% also dropped to 16%, a four-month low.

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