UK services firms toil in May, investment weak - CBI survey

By Andy Bruce LONDON (Reuters) - The services companies that make up the bulk of Britain's economy struggled in the three months to May and remain loathe to invest because of uncertainty around Brexit, a business survey showed on Wednesday. Business and professional services companies reported the biggest fall in the volume of work since August 2012 and were 'extremely negative' about the outlook for the year ahead, the Confederation of British Industry (CBI) said. They expected to cut investment in land and businesses at the fastest pace since 2010, the survey showed

Reuters May 29, 2019 05:05:59 IST
UK services firms toil in May, investment weak - CBI survey

UK services firms toil in May investment weak  CBI survey

By Andy Bruce

LONDON (Reuters) - The services companies that make up the bulk of Britain's economy struggled in the three months to May and remain loathe to invest because of uncertainty around Brexit, a business survey showed on Wednesday.

Business and professional services companies reported the biggest fall in the volume of work since August 2012 and were "extremely negative" about the outlook for the year ahead, the Confederation of British Industry (CBI) said.

They expected to cut investment in land and businesses at the fastest pace since 2010, the survey showed.

The CBI said the volume of work also declined in the consumer services industry, albeit at a slower pace than in the business and professional sector.

Business investment fell throughout 2018 as companies waited for clarity on the terms of Brexit, and grew only slightly early this year. Consumer spending, meanwhile, has been the main driver of economic growth.

The CBI's survey of 129 companies was conducted between April 29 and May 14 -- after the EU allowed Britain to delay Brexit until late October to give lawmakers in London more time to approve a deal.

"Brexit paralysis continues to take a toll on the UK's services firms. Profits, optimism and investment spending are falling sharply amidst a torrid operating environment," CBI economist Anna Leach said.

On the upside, the CBI said services companies remained keen to hire staff -- a finding broadly mirrored by a survey published on Wednesday by the Recruitment and Employment Confederation.

"The jobs market is robust, but more businesses remain negative about the future than positive," REC chief executive Neil Carberry said.

Another survey from the British Retail Consortium showed shop prices rose 0.8% year-on-year in May, up from 0.4% in April and marking the second-highest rate in six years.

"Rising costs associated with currency depreciation, stockpiling, rising minimum wage and the Apprenticeship Levy, have all put upwards pressure on prices for a while, and it now appears that retailers cannot absorb them any longer," BRC chief executive Helen Dickinson said.

(Reporting by Andy Bruce, editing by David Milliken)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date:

TAGS:

also read

France, Germany to agree to NATO role against Islamic State - sources
| Reuters
World

France, Germany to agree to NATO role against Islamic State - sources | Reuters

By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States

China's Xi says navy should become world class
| Reuters
World

China's Xi says navy should become world class | Reuters

BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.