UK growth enjoys summer bloom
Economic growth continued to pick up pace in the three months to August, with strong expectations for the next quarter, according to the latest CBI Growth Indicator.
The survey of 754 respondents across the manufacturing, retail and service sectors showed the pace of growth sped up for a second month running, with a balance of output volumes at +31% in August. This was just below the 2015 high recorded in May (+33%), itself the highest balance since May 2014 (+35%).
The strength of growth was broad-bas – CBI – ed across the sectors, with the business & professional services and retail sectors making particularly large contributions. Meanwhile, growth in manufacturing remained broadly flat.
Expectations for the next three months are buoyant, with another firm expansion in business volumes anticipated, at a slightly cooler rate.
Rain Newton-Smith, CBI Director of Economics, said:
“The weather may have been a washout this month, but the sun has certainly been shining on the British economy. The pace of growth has been energised across the sectors, and it is good news that this is set to continue as we head into the autumn.
“While the overall domestic picture is looking bright, exporters still face a challenge, especially in light of a weaker outlook for global growth and the strength of Sterling making them less competitive.
“Businesses will need to keep a close eye on turbulence in the markets, and whether it spills over into the real economy. The UK’s direct exposure to China is limited, but slower growth there and in other emerging markets has a knock-on impact on confidence around the globe, and could bear down on UK trade.”