UK businesses expect zero growth over next 3 months, survey shows

Individuals stroll alongside New Bond Road in London, Britain, June 15, 2020. REUTERS/Henry Nicholls/File Picture

LONDON, July 31 (Reuters) – British companies don’t count on any progress over the following three months, as a surging value of residing squeezes shopper demand, a month-to-month survey confirmed on Sunday.

The Confederation of British Business (CBI) mentioned members reported above-average progress within the three months to the top of July – barely sooner than within the three months to June – however count on this to peter out within the months forward.

“As companies and customers proceed to be buffeted by rising costs, private-sector exercise has slowed to a close to standstill,” CBI economist Alpesh Paleja mentioned.

The Financial institution of England is extensively anticipated to announce its largest rate of interest rise since 1995 on Thursday, elevating charges to 1.75% from 1.25% to tame inflation that’s already at a 40-year excessive of 9.4%. learn extra

Nevertheless, the BoE has warned that Britain’s economic system is more likely to contract later this 12 months, when a 40% bounce in regulated power tariffs hits customers in October, and has forecast the economic system will contract barely subsequent 12 months.

The USA shrank in each the primary and second quarters of this 12 months, assembly one generally used definition of recession. learn extra

Final week the Worldwide Financial Fund forecast Britain would see the weakest progress of any main economic system apart from Russia subsequent 12 months.

The CBI mentioned its month-to-month output stability, based mostly on surveys of producers, companies corporations and retailers, rose to +8 for the three months to July from +5 for the three months to June. July’s anticipated stability for the following three months was zero, up from -3 in June.

Producers count on present sluggish progress to persist, whereas shopper companies and retail companies see a fall in gross sales, and enterprise companies count on progress to sluggish, the CBI mentioned.

“That is unsurprising, provided that sturdy inflation has been pushing actual wages down sharply, and shopper confidence is at an all-time low,” it added.

Reporting by David Milliken; Enhancing by David Holmes

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