Business banking sector robust, says Lloyds TSB

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Lloyds TSB has announced optimistic results in its monthly business banking barometer.

Overall, the figures showed an 11 per cent recovery in optimism about the economy, although this is eight per cent behind results for July.

The services sector remained the most confident of its own long-term prospects, although manufacturing industries were 57 per cent happier with their outlook after increased exports to Europe.

Trevor Williams, chief economist at Lloyds TSB Corporate Markets, said: "Improved perceptions of the economy could prompt companies to hike capital spending and staff numbers in the months ahead."

"This would give further weight, if any were needed, to the argument in favour of the Bank of England raising interest rates to five per cent in November," he added.

Results for the consumer-based version of the banking barometer, published last week, showed 76 per cent of investors expect interest rates to rise over the next 12 months.

Lloyds TSB Corporate Markets says it provides a "dedicated service" to the business banking sector and has an annual turnover in excess of £2 million.

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