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UK private sector contracts again, but outlook improves – CBI

British business activity, which has been buffeted by the country’s Brexit crisis, fell again in the three months to July but is expected to pick up over the next three months, the Confederation of British Industry said on Sunday.

The balance of firms reporting growth stood at -9%, indicating a less widespread slowdown than June’s -13%, which was the weakest reading in nearly seven years, the CBI’s monthly Growth Indicator showed.

An indicator measuring expectations for the next three months was the strongest since October last year at +9%.

Britain’s economy has been whip-lashed by the twists and turns of Brexit so far in 2019 and by a slowdown in the global economy, caused in large part by rising trade tensions between the United States and China.

Growth was strong in the first three months of the year, as many companies tried to complete work before possible disruption after the original March 29 deadline for leaving the European Union, which has since been pushed back.

The hangover from that early 2019 rush is widely expected to have caused gross domestic product to flat-line or even contract in the second quarter.

“We expect underlying growth to remain subdued with risks from Brexit and global trade tensions remaining high,” Annie Gascoyne, the CBI’s director of economic policy, said.

Britain’s new Prime Minister Boris Johnson has said he is prepared to lead Britain out of the EU without a deal on Oct. 31 if necessary.

That new Brexit deadline could cause a repeat of the stock-building seen in early 2019, some economists have said.

Reporting by William Schomberg, editing by David Milliken

Source: UK Reuters

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UK private sector reports sluggish underlying growth: CBI

UK private sector reported sluggish underlying growth last month as Brexit uncertainty continues to weigh on many businesses, the Confederation of British Industry said on Sunday.

Britain’s economy grew solidly in the first three months of this year, according to official data, boosted in part by factories stockpiling raw materials ahead of a Brexit that failed to come as planned on March 29.

But some business surveys have pointed to weakness since, and the Bank of England has forecast a second-quarter slowdown as the boost from stockpiling fades.

The CBI said its monthly growth indicator sank to -1 for May from zero in April.

“Private sector activity remains stuck in neutral, with conditions in the service sector notably weak,” said CBI economist Alpesh Paleja. “Businesses continue to cite the ongoing drag from Brexit uncertainty, which is holding back key projects, pipelines of work and investment.”

Last week, the CBI wrote to Conservative lawmakers competing to succeed Theresa May as prime minister, urging them to avoid a no-deal Brexit, for which it said the “vast majority” of businesses were unable to prepare.

Reporting by David Milliken; editing by Stephen Addison

Source: UK Reuters