The economic growth of the United Kingdom is combating fears of an inflation-driven crisis on household spending, as the weak pound and global growth fuel a British export growth.
A survey from the Confederation of British Industry (CBI) has revealed that the proportion of companies that are reporting growth in the three months to September exceeded those reporting a decrease in output by a margin of around 11pc.
The number is down a touch on the 14pc that was reported in August. However, it remains higher than its long-run average of 5pc.
Businesses also expect to continue growing in the near future, as the net balance that is predicting growth in the coming three months increased from 16pc to 18pc. This is also better than the average score of 10pc. However, there are some signs of momentum improving and the CBI said that it wants the Government to develop more plans to expand growth and productivity,
“Growth in the economy has held steady through the summer, although at a slightly slower pace than expected by many firms. While we saw growth in most sectors, consumer-facing businesses are having a tougher time of it as inflation tightens purse strings a little more,” said the CBI’s chief economist Rain Newton-Smith. “As we head to the Conservative Party conference, businesses will want to know that the Government is not allowing the domestic agenda to be put on the back-burner. Firms want to see plans set out to raise productivity across the country, by delivering on a modern industrial strategy, raising spending on innovation and improving educational attainment.”
Last Week, Theresa May, the British Prime Minister spoke to set out a defence of capitalism, in the light of a socialist onslaught from Jeremy Corbyn at the annual conference of the Labour Party.
Theresa May said that the industrial strategy “will help business invest in the latest technologies, turn local areas of excellence into national export champions, and support the skills and innovation we need to succeed in the industries of the future”. The prime minister added that new T-levels – technical qualifications – will help fill the skills shortage that are afflicting some industries. But the business group is certain that it wants more work towards these goals as a matter of urgency.
The steady growth that was seen in the CBI survey will also strengthen expectations of an interest rate hike by the Bank of England in November. The Bank’s Governor, Mark Carney, has stated that if the economy remains on its current track, then it might be necessary to increase interest rates.
“We are talking about just easing a bit off the accelerator to keep with the speed limit of the economy,” Carney stated on Friday.