The Lloyds Bank Business Barometer fell for the first time in three months in May, with business confidence declining to 28% from 33% in April

Despite some signs of resilience in the economy, the survey shows that firms remain challenged by inflation and higher wage pressures.

The economic environment remains difficult, with stubborn inflation and higher wage pressures.

The survey shows that more than half of companies intend to raise their prices in the coming 12 months.

The Bank of England has increased interest rates 12 times since December 2021 and is expected to raise Bank Rate further in the coming months in an effort to tame high inflation.

Wage growth fell marginally but remained elevated compared with pre-COVID levels, with nearly a third of businesses expecting pay to increase by at least 3%.

The hiring intentions fell back slightly to 24% in May, down from the ten-month high of 27% reported in April.