BUSINESS confidence in the North-East rose three points during October to three per cent, with more local firms expecting to hire new staff, according to the latest Business Barometer from Lloyds Bank Commercial Banking.

Companies in the North-East report higher confidence in their business prospects, which rose eight points on last month to 15 per cent. When taken alongside their views of the economy overall, this gives an overall confidence of three per cent.

Businesses’ hiring intentions showed that a net balance of 19 per cent of businesses in the region expect to hire more staff during the next year – the highest result of any UK region and a rise of seven points on September’s results.

Across the UK, overall confidence rose four points to six per cent as firms’ confidence in their own prospects climbed two points to 15 per cent.

The Business Barometer questions 1,200 businesses monthly and provides early signals about UK economic trends both regionally and nationwide. This month’s survey was conducted before the government announced its new deal on the UK’s departure from the EU.

Kelly Green, regional director for the North East at Lloyds Bank Commercial Banking, said: “It’s great to see local firm’s confidence in their own business prospects climb this month, which is reflected in their hiring intentions – news that will be welcomed across the region.

“This year we’ve committed to lending North-East businesses up to £700m, and we’ll be by their side with funding and advice to help them grow and recruit.”

Across the region, a net balance of four per cent of businesses said they felt that the UK’s exit from the European Union was having a negative impact on their expectations for business activity, down 16 points on a month ago.

Businesses in the West Midlands showed the most confidence, at 16 per cent, ahead of the South West at 15 per cent, and East Midlands (13 per cent).

Those in Scotland were the least confident, with an overall confidence of minus three per cent, nine points below the national average.

Meanwhile, overall business confidence improved in all four broad sectors, with the largest increases being in the construction sector, which rose eight points to 18 per cent and the manufacturing sector, which increased seven points to five per cent.

Despite confidence in the services sector rising for the first time since June, by three points to zero per cent, overall confidence remained the weakest in this sector, while confidence in the retail sector saw a small increase of one point to 15 per cent.

Hann-Ju Ho, Senior Economist, Lloyds Bank Commercial Banking, said: “Both business confidence and optimism about the wider economy have picked up this month, with economic optimism reaching a three month high as concerns about the impact of the UK leaving the EU eased. However, there was a slight step down in hiring intentions, which could reflect concerns about ongoing economic uncertainty.”