FEARS of economic stagnation in the UK were heightened today, after a leading survey of businesses reported an increasingly gloomy outlook.
The third quarter results “point to a deterioration in the economic situation, with concerning signs of stagnation in the domestic economy”, the British Chambers of Commerce (BCC) said.
And the planned “rebalancing” of the economy towards exports and non-financial products – a target of the government and the Bank of England – is failing to materialise, the survey suggests.
Exports from both manufacturing and service sectors fell to their lowest levels since 2009, the BCC revealed.
The UK’s largest sector – services – expects future export orders to contract, the sub-index reporting a negative balance of minus two per cent.
“The survey shows the real risks facing the economy and the need for the government to act now in putting business growth at the heart of all its policies,” said John Longworth, the BCC’s new director general.
“Government must recognise that business is good for Britain, and put in place measures to bolster confidence and support those companies that have the potential to grow.”
Domestic demand showed minimal growth or stagnation across the board. Domestic factory orders stayed in positive territory yet plummeted to a net balance of three per cent, from plus 18 per cent the previous quarter.
UK-based demand for services dropped to parity (indicating stagnation), a 10 per cent drop from the second quarter of the year.
Employment expectations stayed narrowly positive in both sectors.