Source: Sharecast
According to the latest Lloyds Business Barometer, confidence rose 11 points in May to 50.
The highest score in nine months, it also reversed April’s 10-point fall.
Last month's survey coincided with Donald Trump's so-called Liberation Day tariff regime, which sparked widespread fears of a global trade war and upended financial markets.
Since then, however, some of the most stringent duties have been pulled back, while the UK secured one of the first trade deals with the Trump administration. Washington and Beijing also agreed a crucial 90-day ceasefire, further helping support the recovery across global markets.
Economic optimism rose 16 points in May to 44, while respondents’ own trading prospects strengthened six points to 56.
Both pay expectations and staffing levels also increased.
Amid individual sectors, confidence in construction firms hit a nine-month high of 56, while manufacturing was one point higher.
The service sector reached a one-year high of 54. Retail, however, softened five points to 40, the lowest level since January.
Hann-Ju Ho, senior economist at Lloyds Commercial Banking, said: "The rise in confidence is driven by a sharp increase in economic optimism, reflecting the recovery in financial markets amid the easing of global trade tensions.
"Equally as encouraging is the fact that trading prospects, wage expectations and hiring intentions also saw improvements. The positive trends in these metrics are important signals for potential growth and resilience in the business community and wider economy."
The online survey of 1,200 UK companies was carried out between 1 and 16 May. The sample covers a range of sectors, regions and firm sizes, with annual turnover above £250,000.
Net balances are calculated by deducting the percentage of negative responses from the percentage of positive responses.