The UK economy probably tumbled deeper into recession in the final three months of the year as output in the private sector slowed sharply, a leading business group said.
(Bloomberg) — The UK economy probably tumbled deeper into recession in the final three months of the year as output in the private sector slowed sharply, a leading business group said.
The Confederation of British Industry said activity fell in the fourth quarter at double the pace of the three months through November. That signals an even sharper downturn in December even though a public holiday for Queen Elizabeth II’s funeral in September distorted figures.
December’s results mark the fifth month of quarterly declines, reflecting concerns about soaring inflation, supply chain chaos, Brexit and a surge in interest rates. The CBI expects the UK economy to shrink 0.4% in 2023 before returning to growth in 2024.
“Underlying momentum remains poor,” the report released Thursday said. “Hints of a downturn in our surveys chime with recent GDP data.”
A slowdown in consumer services and manufacturing output drove the decline. Distribution sales and professional services proved more resilient. Retailers enjoyed a boost in the lead-up to the Christmas holiday, but the CBI said it expects this will be short-lived, with volumes likely to decline in the new year.
New data from jobs website Indeed adds to that gloomy picture. It showed that hiring conditions remain challenging, with job postings reaching new post-pandemic highs in December as employers struggle with chronic staff shortages. London posted the fewest new positions since before the pandemic. That may reflect higher rates of working from home and less commuter footfall, Indeed said.
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