British business confidence has risen to its highest level since March, as resilient consumers shrug off the effects of the Iran war and speculation surrounding the Budget is kept to a minimum.

According to the Lloyds Business Barometer, a monthly survey of around 1,200 companies that is closely watched as an early gauge of private sector sentiment, confidence among British firms climbed four points in August to 53 per cent — the highest reading since the outbreak of conflict in the Middle East and above the 12-month average.

Optimism about the health of the wider economy also rose to 49 per cent, an increase of some seven points. As many as 64 per cent of bosses surveyed by the lender said they felt optimistic about the state of the UK, while those feeling pessimistic fell to 15 per cent.

"Businesses are reporting stronger customer demand, greater optimism about the wider economy and growing confidence in their own trading outlook," said Amanda Murphy, chief executive of Lloyds' commercial arm. "While businesses continue to operate in a challenging environment, easing cost pressures and fewer firms expecting to raise prices in the coming year should allow them to focus less on managing headwinds and more on pursuing growth."

The jump in confidence comes even as Donald Trump's campaign in Iran stretches into its sixth month. The Strait of Hormuz — a vital shipping lane for the oil and gas trade, through which a significant share of the world's seaborne oil normally passes — has remained shut to most petrochemical exports throughout the conflict, pushing up energy prices and choking off the supply of other vital goods such as fertilizer.

Researchers attributed the higher confidence levels to robust customer demand, which has held up despite higher energy prices and the impending risk of a resurgence in inflation. On Wednesday, regulator Ofgem confirmed that household energy bills will rise by as much as four per cent from October, their highest level in three years. Since the start of the year, Brent crude has climbed by more than 40 per cent.

Price increases have been especially acute in refined oil products such as diesel and kerosene — used as jet fuel — the cost of which practically doubled overnight after Donald Trump's first strike on Iran.

Companies' trading outlook jumped two points to a three-month high of 58 per cent, according to the barometer, and two thirds of firms expect an increase in output over the year ahead. The proportion of firms expecting to raise prices in the next year also fell by three per cent to just over half — a signal that firms see some scope to rebuild margins rather than pass costs on to customers.

Business confidence has been improving across several closely followed surveys, a departure from previous summers when rampant Budget speculation eroded fragile private sector morale and undermined investment. Confidence surveys of this kind are often tracked by policymakers and economists as a leading indicator of hiring and investment intentions, which tend to feed through to broader economic activity in subsequent quarters.

New Chancellor John Healey has so far opted to keep a lid on rumours about which taxes might rise at his maiden fiscal event in October, despite a fiscal picture that suggests a higher tax burden is likely. How long that calm holds — and whether the October Budget changes the mood — will be a key test of whether August's recovery in sentiment proves durable.