Call to back growth as UK’S economy hits brakes in Q1
● Major survey ‘clear warning’, showing some of poorest figures for about 10 years
has almost “ground to a halt” amid ongoing Brexit uncertainty, according to a new sounding of the UK economy.
Research published today by the British Chambers of Commerce (BCC) suggested that exports, orders, investment and cashflow were all being hit by the impasse of the UK leaving the EU, as well as rising business costs and a slowing global economy.
A poll of 7,000 firms, employing around a million workers, and the largest private sector survey of business sentiment and leading indicator of UK GDP growth, indicated that services and manufacturing firms were being negatively affected.
The study, covering the first three months of the year, showed that business was “hitting the brakes”, said the BCC.
The lack of clarity over the UK’S future relationship with the EU is continuing to weigh on investment intentions in the manufacturing and services sectors, the report noted.
The trade body has been calling for an end to the “relentless uncertainty” over Brexit, which it warns has damaged business confidence and investment plans.
Suren Thiru, the BCC’S head of economics, said: “Our latest survey suggests that UK growth nearly ground to a halt in the first quarter of 2019, with increasing anxiety over Brexit and weakening global economic conditions driving a significant deterioration in almost all the key indicators in the quarter.
“The services sector suffered the more substantial loss of momentum in the first quarter, with both domestic and international activity slowing sharply in the [period].
“The manufacturing sector continues to struggle amid tougher global and domestic trading conditions and rising cost pressures.
“The forward-looking indicators are disappointingly downbeat with weakening orders, confidence and investgrowth ment intentions pointing to precious little growth over the coming quarters, unless substantial action is taken.”
BCC director general Adam Marshall added: “Our findings should serve as a clear warning that the ongoing impasse at Westminster is contributing to a sharp slowdown in the real economy across the UK. Business is hitting the brakes – hard. These are some of the weakest figures we’ve seen in nearly a decade, and that’s no coincidence. The prospect of a messy and disorderly exit from the EU is weighing heavily on the UK economy, and must still be avoided.
“At the same time that firms are having to enact costly contingency plans, the cost of doing business here in the UK continues to rise.
“For too long, Brexit tunnelvision has distracted government from fixing the fundamentals to support growth here in the UK.”
The survey findings contrast with the latest optimism tracker index from the Federation of Small Businesses, which for the UK picked up slightly, but was still 11 points lower than at the same stage last year.