UK firms most pessimistic in eight years amid political crisis
British businesses were at their most pessimistic in eight years in the three months to September, a survey showed today, as the country’s political crisis dragged down expectations of growth.
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The CBI’s latest monthly report showed the gauge of future expectations of private sector activity at its lowest level since December 2011.
Expectations fell across all sub-sectors of the economy: manufacturing, business and professional services, consumer services and distribution.
The CBI’s report also said private sector activity continued to fall in the three months to September, at the same pace as the quarter to August. It said the fall reflected “a sharper decline in business and professional services, coupled with falling retail sales”.
Rain Newton-Smith, CBI chief economist, said: “Decision-makers in boardrooms across the country have been watching politics [last] week with a heavy heart.”
British politics is in crisis as the 31 October Brexit date grows closer. Last week, the Supreme Court said Prime Minister Boris Johnson’s request that the Queen suspend parliament was unlawful.
The ongoing wrangling over Brexit has driven firms to halt investment due to uncertainty about the country’s future economic position. A global slowdown has provided a tough backdrop and helped push the UK economy into contraction in the second quarter.
The CBI today once again said it was vital Britain avoid a no-deal exit from the European Union. Newton-Smith said: “Getting a deal that can pass through Parliament, is acceptable to the EU and protects our economy remains the goal.”
“Exiting the EU without a deal will only extend uncertainty, damage our economy and dent hopes of progress on domestic policy.”
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“Despite all the noise, what must not be forgotten is the importance of getting the UK economy back on track, by supporting investment and innovation which is the bedrock of productivity, and higher living standards.”