Britain’s economy lost some momentum in the past three months but growth remains relatively solid, according to the CBI. In the latest survey to suggest that struggles in the eurozone and geopolitical tensions are hurting exporters, the CBI said manufacturing was the weakest part of the economy in the three months to October.
The CBI’s growth indicator, covering responses from 749 businesses, found that they were generally upbeat about recent trade and optimistic about coming months.
“The economy is continuing to grow, at a slower but nonetheless solid pace,” said Rain Newton-Smith, the CBI’s director of economics. “This isn’t surprising, since we expected growth to tail off somewhat in the second half after a strong start to the year.”
The report, which brings together the CBI’s surveys of retailers, services companies and manufacturers, covers around three-quarters of the private-sector economy. In the latest three months, the net balance of companies reporting growth slipped to 19%. That is above the long-run average, but down on September’s 23%.
The results chime with other business surveys and official data suggesting that Britain is still enjoying one of the fastest growth rates among developed economies – but that external pressures are weighing on some companies.
Newton-Smith said: “Manufacturers in particular are feeling under pressure as export growth continues to disappoint. Faced with huge political and economic uncertainties, ranging from a weak eurozone, a deteriorating outlook for emerging markets and an increasingly febrile geopolitical climate, it’s little wonder that firms have been gradually scaling back their predictions for growth.”
For the next quarter, businesses are predicting slightly stronger growth.
