Business confidence across Scotland has surged as the country heads into the busy summer tourist season with events such as the Edinburgh Fringe and the UCI Cycling World Championships in Glasgow coming up.

According to the latest monthly barometer from the commercial arm of the Bank of Scotland, overall business confidence in Scotland rose 28 points during the beginning of June to 50%. Companies reported increased optimism about their own prospects, up 22 points on the previous month at 52%, and greater confidence in the broader economy, up 34 points to 48%.

A net balance of 49% of the 1,200 firms surveyed said they expect to increase staffing levels in the coming year as they evolve their product and service offerings, invest in their teams and enter new markets. That was 20 points higher than in May.

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Chris Lawrie, area director for commercial at the Bank of Scotland, said it was “great” to see the increase in optimism.

“Many businesses will be looking forward to a busy summer period, especially with large events like the Edinburgh Fringe on the horizon which will no doubt bring excellent trading opportunities for the hospitality and leisure industry,” he said.

“It’s encouraging to see leadership teams looking to evolve their offering and making plans to invest in their colleagues too.”

Across the UK business confidence increased by nine points to 37% in June, with all regions reporting a positive reading and eight out of 10 posting a higher confidence reading than in May.

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Scotland had the second-highest confidence reading after the East Midlands on 52%, followed by the north-east of England at 47% and Yorkshire at 45%. London and the south-west of England were the only regions to report a decline.

Manufacturers reported their highest level of confidence since early 2022, rising by 10 points to 50%. Meanwhile, the dominant services sector posted an 11-point increase to 37%, the highest recorded since February 2022.

"The boost in confidence and hiring intentions is a welcome sign that businesses are managing well in what continues to be a challenging environment," said Paul Gordon, managing director of commercial banking at BoS parent group Lloyds Bank. 

“It’s particularly pleasing to see that for both services and manufacturing, two sectors which have been hardest hit in recent years, there is real optimism for trading prospects and growth. However, wage pressures continue to be above pre-pandemic levels and firms need to be mindful of this and ensure that costs are evenly distributed and managed closely.”