Business confidence in the UK waned during September, a survey has said today.

According to the latest Lloyds TSB Corporate Markets Business Barometer, confidence levels fell as weaker sentiment across the manufacturing sector started to "take its toll".

However, Lloyds said the overall trend in confidence remained positive, and the results for September were simply a reminder "we are in the early stages of recovery".

The survey showed the balance of firms expecting an upturn in business activity over the next year fell three per cent to 29 per cent (calculated by deducting percentage of firms with negative expectations from those with positive expectations).

Trevor Williams, chief economist, Lloyds TSB Corporate Markets, said: "Business confidence has been on an upward spiral for some months, and there’s no reason to believe that this overall trend has come to an end.

"September’s dip in confidence has clearly been driven by weakening optimism amongst manufacturing firms, caused perhaps by the levelling off of the upturn in global trade volumes. But confidence across other sectors remains stable.

"Nevertheless, any change in confidence levels is not to be ignored and should serve as a sobering reminder that a strong and sustainable recovery is by no means a certainty."

The signs of weakened business confidence were mirrored by a similar decline in confidence about the wider economy. The balance of firms expecting economic conditions to improve within the next 12 months fell from 46 per cent last month, to 42 per cent in September.

Lloyds said the national dip in confidence levels was reflected across the regions, albeit in varying degrees. In the North, businesses’ confidence in trading prospects slipped eight per cent, to 29 per cent, while in the Midlands and the South, there was a one per cent fall, to 31 per cent and 27 per cent respectively.

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