Business confidence across the North of England climbed significantly in July, according to the latest Business Barometer from Lloyds, with firms pointing to increased investment, stronger demand, and positive economic indicators.

The findings highlight a robust summer for northern enterprises, with the North East and Yorkshire registering some of the country’s highest regional confidence readings.

North East Hits Record High
In the North East, business confidence surged 21 points during July to reach 75%, sitting well above the 12-month average of 58%. Companies reported higher confidence in their trading outlook (up eight points to 80%) and economic optimism (up 34 points to 70%).

Growth drivers in the region included increased investment in capacity or technology (53%) and improved economic conditions (43%). Additionally, a net balance of 50% of businesses expect to increase staff levels over the coming year.

Martyn Kendrick, Regional Director for North East at Lloyds, said: “It is fantastic to see North East business confidence reach such a high, underlining the strength, ambition and resilience of firms across the region.”

“Even more encouragingly, that optimism is being matched by clear plans for growth. Businesses are looking to invest in AI and automation, explore new markets and expand their teams over the year ahead.”

“This record level of confidence reflects the real momentum building across the North East, and we will continue to support businesses as they invest, grow and seize the opportunities ahead.”

Yorkshire Sees Strong Upward Momentum
Yorkshire and the Humber experienced a similar upward trajectory, with business confidence rising 14 points in July to 61%. This marks the second-highest reading for the region in 2026, comfortably exceeding its 12-month average of 43%.

Confidence in own trading outlook rose 15 points to 60%, while economic optimism increased 13 points to 62%. Strong consumer demand, expected new contracts (56%), and investments in capacity or technology (50%) underpinned the positive outlook. Hiring intentions also strengthened, with 59% of regional businesses anticipating staff increases over the next year.

North West Returns Above National Average
In the North West, business confidence rose six points to 49%, lifting regional sentiment back above the UK average. Trading outlook increased four points to 58%, driven largely by expectations of securing new clients or contracts (66%).

Looking ahead, North West businesses identified product and service innovation (61%), new market entry (45%), and team training (41%) as key growth priorities.

Chris Whittle, Area Director in the North West at Lloyds, said: “It’s encouraging news that business confidence is up in the North West this month. Summer can always be a busy time of year for local businesses and it’s great to see they have clear priorities in mind for the coming months, whether that’s introducing new services or entering new markets.”

“As firms look to capitalise on this renewed confidence, we’ll be there to provide the support they need to help them pursue new opportunities for growth.”

The National Picture
Nationwide, UK business confidence rose five points in July to 49%, hitting a four-month high. The national uplift was supported by falling global energy prices, the Bank of England holding interest rates, and an interim peace agreement in the Middle East during the survey window.

It’s encouraging to see business confidence reach its highest level in four months, driven by a significant improvement in economic optimism. While challenges remain, these results suggest many businesses are feeling more optimistic about the opportunities ahead.

Businesses have remained remarkably resilient in recent months, with many focusing on investing in their future, improving productivity and making sure they’re well placed to respond as market conditions change. The stronger confidence we're seeing among smaller businesses and firms focused on the domestic market is particularly encouraging, suggesting more businesses are starting to see opportunities for growth and investment.