British business and professional services firms are their most downbeat since November 2016 due to slowing sales growth and fast-rising costs, as well as uncertainty about the terms on which Britain will leave the European Union next year.
The Confederation of British Industry said its quarterly survey of service-sector sentiment sank to -4 from +14 for firms providing services in areas such as computing, consultancy and telecoms, and costs rose at the fastest pace since August 2008.
Consumer-facing businesses did better, after optimism recovered to an above-average +7 in the three months to August from a dip to -11 in May, though their profits were squeezed by rising costs too.
“Demand growth is expected to remain subdued next quarter and firms seem hesitant over the prospects for expanding their businesses in the year ahead,” CBI chief economist Rain Newton-Smith said.
“The government and Brussels need to get on with … agreeing a new relationship between the UK and the EU that puts people’s livelihoods above politics,” she added.
Official data showed Britain’s services sector stagnated in June, and recorded only modest annual growth of 1.5 percent.
Last week Britain’s Brexit minister, Dominic Raab, said he was confident of securing an interim deal with the European Union before Britain leaves in March 2019, but warned of red tape, border delays and costlier credit card fees without one. (Reuters)