People walk on New Bond Street in London, Britain on June 15, 2020. REUTERS/Henry Nicholls/File photo
LONDON, July 31, 2010 (Reuters) – British businesses expect no growth in the next three months as the rising cost of living dampens consumer demand, a survey showed on Sunday.
Members of the Confederation of British Industry (CBI) reported above-average growth in the three months to the end of July – slightly faster than in the three months to June – but expect this to level off in the coming months.
CBI economist Alpesh Paleja said, “Private sector activity has come to a standstill as companies and consumers continue to grapple with rising prices.”
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Last week, an International Monetary Fund forecast predicted Britain would see the weakest growth of any major economy other than Russia next year.
The CBI’s monthly scorecard, based on a survey of manufacturers, services companies and retailers, rose to +8 in the three months to July from +5 in the three months to June. In July, the expected balance for the next three months was zero, up from -3 in June.
While manufacturers expect current slow growth to continue, consumer services and retail businesses are expected to see a decline in sales and business services are expected to slow growth, the CBI said.
“This is no surprise given that strong inflation is driving down real wages and consumer confidence is at an all-time low,” he added.
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Reporting by David Milliken; Editing by David Holmes
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