LONDON (Reuters) - British business sentiment fell slightly in October after touching its highest since the start of the COVID-19 pandemic the month before, a survey by Lloyds Bank showed on Monday. Lloyds said its business confidence barometer fell to 43% in October from 46% in September but was well above its long-run average of 28%, despite rising energy bills and supply chain difficulties. The survey chimed with the relatively upbeat flash purchasing managers’ index published on Oct. 22 and may give Bank of England policymakers confidence to raise interest rates on Thursday for the first time since the start of the pandemic. “While economic optimism saw a slight dent in October due to rising costs and the on-going supply chain issues, it is clear that firms are still feeling relatively buoyant,” Hann-Ju Ho, senior economist at Lloyds Bank Commercial Banking, said. The BoE’s chief economist, Huw Pill, has said he expects inflation to reach 5% in the coming months - more than twice the BoE’s target - and that a rate rise would be a live question at the central bank’s meeting this week. But other policymakers have said the BoE can do little to tame the short-term surge in energy costs that is pushing up inflation, and they are more concerned about residual weakness in the job market as the government ends its furlough programme. Britain’s Office for National Statistics estimates that between 900,000 and 1.4 million employees were still partly or fully on furlough when the programme ended on Sept. 30. Lloyds said 60% of the firms it surveyed between Oct. 1 and Oct. 15 planned to bring all their remaining furloughed staff back to work, while 30% intended to bring back over half. Reporting by David Milliken; Editing by William Schomberg