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[LONDON] Growth in Britain's private sector eased to its lowest level since the end of last year during the three months to June, although optimism among companies surged, according to the Confederation of British Industry.
The CBI said on Saturday its monthly growth indicator - based on separate surveys of manufacturers, retailers and services - fell to +14 in June, its lowest since December, from +33 in May.
While manufacturing growth ticked up, the pace of expansion in services companies comprising the bulk of Britain's private sector rowed back from a more than nine-year high in the three months to May.
Despite June's slowdown, output expectations for the next three months rose to their highest level since last August. "Activity over the quarter as a whole has been good," said Rain Newton-Smith, the CBI's director of economics. "We expect the economy to sustain a solid pace of growth over the remainder of the year as lower oil prices and inflation continue to boost real incomes and consumer spending." The CBI report looked at odds with surveys of purchasing managers from Markit/CIPS earlier this week, which showed a surging services sector in June but the weakest expansion among manufacturers in two years.
Still, both sets of indicators suggested Britain's economy grew at a solid pace in the second quarter.
Britain's economy expanded 0.4 per cent from April through June, slightly more than previously thought, according to official data on Tuesday. Most economists and the Bank of England expect the pace of growth will quicken in the second half of 2015.
The CBI identified the Greek crisis as the most immediate risk to Britain's economic outlook, mainly through financial market and currency volatility as direct exposure to the debt-stricken country is small.
Exporters faced a longer-term challenge from the strength of sterling against the euro, it added.