LONDON (Reuters) – British business confidence fell to its lowest level of 2024 in December but employers were a bit more optimistic about the wider economy, according to a survey published on Monday, while separate data showed a pre-Christmas rise in hiring and pay.

The Lloyds (LON:) Bank Business Barometer measure of confidence among companies fell by 2 points to 39%, still above its long-run average of 29%.

Hann-Ju Ho, senior economist at Lloyds Bank Commercial Banking, said the fall extended a drift down since the summer.

“The key difference in this month’s results is that the fall in confidence is driven by firms’ own trading prospects,” he said. “There was, however, more positivity regarding the wider economy and, going into 2025, this offers some hope if companies continue to feel confident about the economy.”

Britain’s economy contracted in September and October – the first consecutive monthly falls in output since the COVID-19 pandemic – as employers worried about the new government’s first budget which was announced on Oct. 30.

The Bank of England last week forecast zero growth in gross domestic product in the final quarter of 2024 but it kept interest rates on hold as it awaited more clarity on the impact on inflation from the budget’s tax increases for employers.

Lloyds’ gauge of price intentions increased slightly in December and remained well above the long-run average.

A separate survey suggested the labour market was recovering some of its momentum in the run-up to the Christmas holidays.

Online jobs website Adzuna said its measure of growth in vacancies rose by the most in 2024 so far in November, up by 2.3% from October, driven in part by the logistics sector.

Average salaries advertised on Adzuna last month rose by 6.5% from a year earlier, the biggest increase since April 2021.

Official data last week showed unexpectedly fast pay growth across the economy of 5.2%, well above the rate of around 3% which the BoE views as consistent with stable inflation.

However, Andrew Hunter, co-founder of Adzuna, said employment trends were soon likely to reflect the impact of the budget as well as the slowdown in the economy.

“Right now we are seeing a very competitive hiring landscape,” Hunter said. “Yet we expect that the wider macroeconomic environment may begin to impact hiring figures early next year.”