The CBI’s growth indicator, based on a poll of almost 800 private companies, fell to +3 in the post-Brexit quarter, down from +8 in the three months leading up to the vote. However, expectations have jumped to +22 for the final few months of 2016, the highest level since September 2015.
The measure showed manufacturing output grew as the price of sterling fell after the Brexit vote, helping exporters. Sectors including retailers, consumer services, business and professional services fell slightly.
Rain Newton-Smith, chief economist at the CBI, commented: “While the economy has seen slight growth this month, firms are confident that autumn will bring a surge in activity. Exporters continue to reap the benefits of a weaker sterling, but our services sector has not only felt a rise in uncertainty over demand, but also a drop in their sales volumes.”
However, The CBI said uncertainty over Britain’s future relationship with the EU depressed planned investment, which would hinder any overall productivity gains and long term growth.
Mr Newton-Smith added: “With businesses keen to build momentum for the rest of the year and into 2017, they want the Government to outline clear plans for negotiations to leave the EU and deliver an Autumn Statement that will drive investment and deliver economic growth and prosperity.”
CBI www.cbi.org.uk
