LONDON (Reuters) – British companies reported a pickup in development within the three months to December however they anticipate a slowdown in early 2018 as excessive inflation takes its toll on households, the Confederation of British Industry stated on Thursday.
The CBI’s month-to-month development indicator – based mostly on surveys of how firms’ output has modified over the earlier three months – jumped to +19 in December from +6 in November, which was the joint lowest stage in additional than a yr.
Growth was broad-based throughout sectors, the CBI stated.
By distinction, the forward-looking part of the CBI development survey fell to +four, its lowest stage since instantly after the Brexit vote in June 2016, from +6 in November.
“Persistent cost pressures will ensure inflation remains at a high level, perpetuating the squeeze on household spending, particularly impacting consumer-facing firms and retailers,” Anna Leach, the CBI’s head of financial intelligence, stated.
British inflation hit its highest stage in almost six years in November when it rose to three.1 %, pushed up largely by the autumn within the worth of the pound after voters determined to take the nation out of the European Union.
Wages have been rising extra slowly than costs and official knowledge launched final week confirmed households elevated their spending on the slowest tempo since 2012 within the July-September interval.
The pinch on client spending and uncertainty for a lot of firms about what Brexit means for them has weighed on Britain’s general financial system which has grown extra slowly than its friends in Europe this yr.
Many forecasters anticipate development will stay sluggish in 2018.
The CBI development indicator is predicated on a mixture of its surveys of producers, retail and distribution firms and business companies corporations, which it says covers about three quarters of the private-sector financial system.
Writing by William Schomberg; Editing by Andrew Heavens