Accountant’s poll shows UK economy well below trend

Ben Southwood
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THE UK’s economic output is still growing much slower than its trend rate, a poll of polls from financial services firm BDO showed today.

BDO’s output index rose from 91.2 in September to 92.1 in October, but this remained below the trend level of 100.

The situation for optimism was similar, with a rise of 0.7 from September to hit 93.2 in October, indicating a slowly improving, but still gloomy, picture. However, this improvement came entirely from the service sector, where optimism improved from 93.1 to 94.2 – in manufacturing sentiment actually worsened, dropping to 89.2 in October from the 90.2 recorded in September.

But BDO’s inflation index was a more positive nugget in the data, showing a plunge from 102 in September to 100.2, the lowest for 12 months. Hitting exactly 100 would suggest inflation at 2.3 per cent, the average level since 2000.

Peter Hemington at BDO said the data was “cause for cautious optimism” but called on the government to consolidate the improvements with business friendly initiatives in the Autumn statement. Hemington wanted the government to lay out concrete plans for the establishment of a government lender to make loans to business.