UK businesses record stronger activity in three months to Oct

london — British businesses reported stronger activity in the three months to October after an initial slowdown following June’s vote to leave the European Union, the Confederation of British Industry said on Sunday.

The CBI said its monthly growth indicator - which is based on surveys of how companies’ output has changed over the previous three months - rose to +8 in October from a six-month low of +3 in September.

“Manufacturing exports are riding high on the back of weaker sterling and consumers are continuing to spend on the high street, but activity is more modest in the services sector,” CBI chief economist Rain Newton-Smith said. However the CBI said there were likely to be tougher times ahead, as uncertainty about the terms on which Britain would leave the EU had led to a “sharp deterioration” in planned investment. “Although growth will be robust for the remainder of this year, we expect uncertainty ... to dampen business investment in 2017, along with a rise in inflation which will knock household spending,” Newton-Smith said.

The forward-looking component of the CBI growth survey fell to +13 in October from a one-year high of +22 in September, though this was still above its long-run average.

Last week the CBI said it expected growth to slow to 1.3 per cent next year from 2.0 per cent in 2016, and to 1.1 per cent in 2019. — Reuters