British firms expect better growth this year

LONDON: Businesses expect Britain to end the year on a high, with improvements in manufacturing, retail and services spurring the fastest pickup in more than a year.

Companies’ expectations for output in the fourth quarter rose to 22 in September, the Confederation of British Industry (CBI) said in its monthly “growth indicator” report released on Sunday. That’s the highest since September 2015. Even so, it sounded an alarm about longer-term prospects, with sentiment and investment intentions likely to remain “subdued.”

Surge in activity

“Firms are confident that autumn will bring a surge in activity,” said Rain Newton-Smith, chief economist at the CBI. “With businesses keen to build momentum for the rest of the year and into 2017, they want the government to outline clear plans for negotiations to leave the European Union.”

Recent data show the UK economy has been stronger than expected in the aftermath of Britain’s vote to leave the European Union. Still, the CBI said firms were more cautious on the longer-term economic outlook, with business decisions likely to be delayed.

“Firms’ optimism about general business conditions have deteriorated sharply, falling at rates last seen during the height of the euro zone crisis at the end of 2011, and in some cases during the 2008/9 recession,” the group said, citing its survey data.