UK economy set to ‘stagger’ to the end of 2018 as business confidence slumps

THE ECONOMY is set to “stagger” to the end of the year after business output fell to its lowest level since the summer, according to a new report.

Research by advisers BDO LLP suggested that business confidence has slumped to its lowest level since the start of 2017.

A rejection of Prime Minister Theresa May’s Brexit deal by MPs on Tuesday could see a further fall in confidence, the report warned.

The study among 4,000 companies indicated that output has been particularly badly hit among manufacturers.

Peter Hemington, of BDO LLP, said: “Declining output and falling confidence demonstrate that UK businesses have become disillusioned by the Government’s approach to ensuring that a business-friendly Brexit will be passed by Parliament.

“We are hopeful that Parliament will prevent the UK from sleepwalking towards a no-deal exit from the EU.

“Nonetheless, it remains vital that we find a clear resolution urgently so that businesses can begin to make preparations for Britain’s future trading relationships.”

Another study from NatWest revealed that a slowdown in the UK’s economic growth in November was led by a downturn in London business activity. The latest NatWest Regional PMI showed variations in business trends across the UK.

Firms in Yorkshire were the most optimistic about future output, despite business confidence in the region having softened to a 28-month low, the survey said.

Sebastian Burnside, NatWest chief economist, commented: “Though there were a number of regions where November data indicated a drop in economic performance, the one that perhaps stood out most was London, where activity fell for the first time since the wake of the EU referendum.

“Here, and in most other regions, heightened uncertainty among clients was reportedly acting to undermine demand.”