Recent economic turbulence in China has yet to impact on UK economic growth continued to pick up pace in the three months to August, with strong expectations for the next quarter, according to business organisation the Confederation of British Industry (CBI).
The CBI’s latest growth indicator, based on a survey of 754 respondents across the UK’s manufacturing, retail and service sectors showed the pace of growth sped up for a second month running, with a balance of output volumes at +31% in August. This was just below the 2015 high recorded in May (+33%), itself the highest balance since May 2014 (+35%).
The strength of growth was broad-based across various sectors, with the business/professional services and retail sectors making particularly large contributions. However, growth in manufacturing remained broadly flat.
The CBI reports that expectations for the next three months are buoyant, with another firm expansion in business volumes anticipated, although at a slightly slower rate.
“While the overall domestic picture is looking bright, exporters still face a challenge, especially in light of a weaker outlook for global growth and the strength of Sterling making them less competitive,” said Rain Newton-Smith, CBI director of economics.
“Businesses will need to keep a close eye on turbulence in the markets, and whether it spills over into the real economy. The UK’s direct exposure to China is limited, but slower growth there and in other emerging markets has a knock-on impact on confidence around the globe, and could bear down on UK trade.”