Boost in manufacturing has failed to lift the United Kingdom economy, survey suggests

Cornelia Mascio
Октября 13, 2017

British manufacturers enjoyed their strongest quarter since the start of 2015, in spite of "muted" growth in the broader economy, according to analysis based on a massive survey of United Kingdom businesses published today.

The British Chambers of Commerce said in its Quarterly Economic Survey on Friday that economic growth is simply not strong enough right now to necessitate a Bank of England rate hike - which is widely expected when the bank's Monetary Policy Committee holds it November meeting.

The survey questioned firms between 21 August and 11 September 2017.

Dr Adam Marshall, director general of the BCC, said: "The uninspiring results we see in our third quarter findings reflect the fact that political uncertainty, currency fluctuations and the vagaries of the Brexit process are continuing to weigh on business growth prospects".

"The Chancellor's Autumn Budget is a critical opportunity to demonstrate that the government stands ready to incentivise investment and support growth here at home", he stated.

"While much of Westminster and Whitehall is distracted by Brexit, business needs action now on the home front".

The services sector, which is a far greater part of the United Kingdom economy, saw domestic sales and orders remain static over the period. "However, the relative size of the sector means that its contribution to UK GDP growth is likely to have remained limited this quarter". Its employment expectations, investment in training and confidence in profitability and turnover have also stayed much the same. Nearly three-quarters of manufacturers reported recruitment difficulties, while in the services sector troubles hiring staff were at their highest since the first quarter of 2016. In particular, those businesses that depend on the consumer have reported weaker growth rates.

Suren Thiru, head of economics at the BCC, said it was "extraordinary" that the Bank of England was considering a rate rise in this environment: "With UK economic conditions softening and continued uncertainty over Brexit, it is vital that the MPC provides monetary stability".

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