A monthly survey released on Sunday revealed that British firms do not expect any growth in the next three months as rising living costs constrain consumer demand.
The Confederation of British Industry (CBI) said that members had above-average growth in the three months to the end of July, slightly quicker than in the three months to June, but that this is expected to slow in the coming months.
"As firms and consumers continue to be buffeted by rising prices, private-sector activity has slowed to a near standstill," CBI economist Alpesh Paleja said.
The Bank of England is widely expected to announce its largest interest rate increase since 1995, boosting rates to 1.75 percent from 1.25 percent in order to manage inflation, which is already at a 40-year high of 9.4 percent.
However, the Bank of England has cautioned that Britain's economy is expected to fall later this year, when a 40% increase in regulated energy rates hits consumers in October, and has anticipated a modest contraction next year.
The United States shrank in both the first and second quarters of this year, fitting one definition of a recession. more info
The International Monetary Fund predicted last week that Britain would have the slowest growth of any major economy other than Russia next year.
The CBI reported that its monthly production balance, based on surveys of manufacturing, service companies, and retailers, increased to +8 in July from +5 in June. The anticipated balance for the following three months was zero in July, up from -3 in June.
Manufacturers expect current weak growth to continue, while consumer services and retail sectors expect sales to fall and business services expect growth to stagnate, according to the CBI.
"This is unsurprising, given that strong inflation has been pushing real wages down sharply, and consumer confidence is at an all-time low," it added.
(Source:www.usnews.com)
The Confederation of British Industry (CBI) said that members had above-average growth in the three months to the end of July, slightly quicker than in the three months to June, but that this is expected to slow in the coming months.
"As firms and consumers continue to be buffeted by rising prices, private-sector activity has slowed to a near standstill," CBI economist Alpesh Paleja said.
The Bank of England is widely expected to announce its largest interest rate increase since 1995, boosting rates to 1.75 percent from 1.25 percent in order to manage inflation, which is already at a 40-year high of 9.4 percent.
However, the Bank of England has cautioned that Britain's economy is expected to fall later this year, when a 40% increase in regulated energy rates hits consumers in October, and has anticipated a modest contraction next year.
The United States shrank in both the first and second quarters of this year, fitting one definition of a recession. more info
The International Monetary Fund predicted last week that Britain would have the slowest growth of any major economy other than Russia next year.
The CBI reported that its monthly production balance, based on surveys of manufacturing, service companies, and retailers, increased to +8 in July from +5 in June. The anticipated balance for the following three months was zero in July, up from -3 in June.
Manufacturers expect current weak growth to continue, while consumer services and retail sectors expect sales to fall and business services expect growth to stagnate, according to the CBI.
"This is unsurprising, given that strong inflation has been pushing real wages down sharply, and consumer confidence is at an all-time low," it added.
(Source:www.usnews.com)