UK businesses expect zero growth over next 3 months, survey finds
July 31, 2022 11:56:23 a.m.
British businesses expect no growth over the next three months as rising living costs squeeze consumer demand, according to a monthly survey released on Sunday.
The Confederation of British Industry (CBI) said its members recorded above-average growth in the three months to the end of July – slightly faster than in the three months to June – but s expect that to fade in the coming months.
“As businesses and consumers continue to be rattled by rising prices, private sector activity has slowed to a virtual standstill,” said CBI economist Alpesh Paleja.
The Bank of England is expected to announce on Thursday its largest interest rate hike since 1995, from 1.25% to 1.75% to control inflation which is already at 9.4%, its highest level in 40 years.
However, the BoE has warned that Britain’s economy is set to contract later this year, when a 40% jump in regulated energy prices hits consumers in October, and forecast the economy to contract slightly l ‘next year.
The United States fell in the first and second quarters of this year, meeting a commonly used definition of a recession.
Last week, the International Monetary Fund predicted Britain would see the weakest growth of any major economy other than Russia next year.
The CBI said its monthly production balance, based on surveys of manufacturers, service companies and retailers, rose to +8 for the three months to July, from +5 for the three months to July. in June. The expected July balance for the next three months was zero, compared to -3 in June.
Manufacturers expect the current sluggish growth to persist, while consumer services and retail businesses see sales fall, and business services expect growth to slow, the company said. CBI.
“This is not surprising, given that high inflation has depressed real wages sharply and consumer confidence is at an all-time low,” he added.