The ‘UK economy is stuck in a rut’ warns the British Chambers of Commerce (BCC), a business body, in its latest quarterly economic survey.
‘These figures reinforce what we are hearing from businesses up and down the country – the uncertainty over Brexit, and the lack of bold moves to boost business at home, are starting to bite,’ says Doctor Adam Marshall, Director General of the BCC.
The survey ‘shows little to be cheerful about as growth flatlines and business confidence weakens’, says the BCC, which predicts that this year’s UK annual economic growth will hit its lowest level since the financial crisis.
In the services sector, which accounts for about 80% of the UK’s economy, the percentage of firms attempting to recruit hit the lowest level since the first quarter (Q1) of 1993, according to the survey, with many firms ‘seemingly giving up trying to hire new staff’. The percentage of firms experiencing difficulties hit the highest level since the survey began in 1989. Despite this, Suren Thiru, head of economics at the BCC, notes that ‘the services sector is still likely to have been the main driver of Q3 growth’.
Uncertainty over future trading conditions is not only taking its toll on the services sector but also on manufacturers. According to the survey, export sales and orders fell to the lowest level since the EU referendum in 2016. The percentage of manufacturing firms pointing to raw materials as a cost pressure rose sharply to 81% from 65%, the highest level since Q2 of 2011.
The British Chancellor, Philip Hammond, will present his annual budget on Monday 29 October, having pushed the date forward because of Brexit negotiations. The BCC is urging the government to use this budget ‘to deliver bold action to boost investment and confidence’.
The BCC’s Q3 survey is made up of 5600 responses from businesses across the UK and is the largest private business survey in the country.