Carluccio’s opened in Beverley last month. An unremarkable event, for sure, and certainly of little interest to the compilers of Britain’s national income figures.
Yet the move by the Italian restaurant chain into the wealthy East Riding town is part of a trend for eating out that has generated much of the UK’s extra services industry growth in the past three years. And it is this desire among households to spend increasing amounts of their disposable incomes in restaurant chains and wine bars that has translated into higher GDP growth.
Despite the continuing closure of pubs across Britain, the eating and drinking out market has been booming, with a net 1,770 new restaurants opening in the past 12 months, according to the latest data.
Last month, however, the survey evidence from Markit’s purchasing managers’ index (PMI) for the leisure and restaurant sector suggests the growing appetite for eating out is starting to wane.
Markit’s chief economist, Chris Williamson, said slowdown in growth might be caused by nervousness about a possible rise in interest rates next year. Or it might just be a pre-Christmas lull. We will need to wait and see.
Things were going better in financial services, IT and computing, and transportation, he said. All three have shown strong growth in the past two years and that continues unabated.
While the extra investment in IT services can only benefit productivity, the rise in transportation appears to be based on bringing extra imports into the country, with vans chasing round delivering them – many purchased on Black Friday.
The balance of payments is in a parlous state, with the mismatch between imports and exports at a record, and a deficit far worse than other OECD countries. The UK needs an economy based on increases in exports, not one that relies on the income from selling and transporting ever larger amounts of imported goods.
And it remains a fact that the financial services sector needs a period of recovery after the battering it took seven years ago. Its expansion this year could be a signal that the UK is be returning to its bad old ways – reviving the days when GDP growth increasingly relied on banks and insurers for the extra income that put the UK’s European rivals in the shade.
