The measure of business confidence is at its highest since August 2022.
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British companies were the most upbeat about their trading prospects in 10 months in June and their hiring plans increased again but rising interest rates could prompt consumers to rein in spending, according to a survey published on Sunday.
Trade body Make UK and accountants BDO said their measure of business optimism hit its highest since August 2022, helped by the survey's gauge of inflation pressure dropping to its lowest in nearly two years.
The survey's employment index posted its fifth consecutive monthly increase with rises in the number of self-employed and part-time workers, despite a slowdown in output growth with manufacturers seeing the worst output reading since May 2020.
"Whilst there's hope that the new (energy regulator) Ofgem price cap will drive down household energy prices and in turn ease inflation, the recent rise in interest rates and stagnating price growth indicate that this may still be a long way off," Kaley Crossthwaite, Partner at BDO LLP said.
The Bank of England, which is trying to curb the highest inflation rate among the world's big rich countries, is worried about long-term price pressures in the labour market and it is widely expected to continue raising interest rates.
(Reporting by Suban Abdulla; Editing by William Schomberg)