UK private sector growth eases as consumer-facing businesses battle tightening purse strings

Growth in the UK’s private sector eased slightly during the three months to September, according to the latest Growth Indicator from the Confederation of British Industry (CBI).

The composite measure based on 728 respondents across the distribution, manufacturing and service sectors showed a balance of +11 per cent of firms reporting a rise in output, compared to +14 per cent in the three months to August.

Growth was mixed across sectors, with the pace easing in manufacturing and “fizzling out” in business and professional services. Growth in consumer services fell slightly, while distribution reported an acceleration.

Private sector firms were more upbeat about the coming three months, with a balance of +18 per cent expecting growth to pick up.

“Growth in the economy has held steady through the summer, although at a slightly slower pace than expected by many firms,” said Rain Newton-Smith, the CBI’s chief economist. “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.

“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.”

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