You are here
UK economy finished 2015 strongly, says CBI
[LONDON] Growth in Britain's private sector picked up speed in the three months to December and companies think the momentum will carry on into early 2016, a leading employers group said, suggesting a recent slowing of the economy might be easing.
The Confederation of British Industry said on Monday its monthly growth indicator - based on surveys of manufacturers, retailers and services - rose to a three-month high of +20 from +13 in November and was above a long-run average of +5. "The UK economy has finished the year strongly, with business services acting as a lightning rod for growth," said Carolyn Fairbairn, the CBI's director-general. "Nonetheless, there is no room for complacency in 2016 as significant challenges to global growth remain." A separate survey of chief financial officers of large British companies, conducted by accountants Deloitte, showed business confidence fell back to levels last seen in 2012.
Growth in business services offset a slight fall in manufacturing in the three months to December, the CBI said.
The slowdown in the global economy and the strength in sterling have hampered British exports, leaving the recovery reliant on consumers who have been helped by a combination of low inflation, near rock-bottom interest rates and rising wages.
Britain's economy has outpaced many of its peers in the developed world over the past couple of years but growth slowed to 0.4 per cent in the third quarter, according to unexpectedly weak official figures published in December. In 2015 as a whole, growth is likely to have slowed to around 2.2 per cent, down from 2.9 per cent in 2014.
The Bank of England has said it expected the economy to grow by 0.6 per cent in the fourth quarter of 2015. It is watching for signs of stronger wage growth before moving towards its first interest rate hike since before the financial crisis.
The CBI survey found output expectations for the next three months rose to +20 in December from +17 in November.
Some economists have warned that uncertainty over Britain's planned referendum on its membership of the European Union could hurt growth in 2016. Prime Minister David Cameron has said he will hold the referendum within the next two years.