BCC indicators points to slowing UK economy

The quarterly economic survey issued by the British Chamber of Commerce says that all indicators point to a slowdown coming in the service sector in the UK, which accounts for two-thirds of the economy.

The survey, which looks at 5,801 UK companies, found that export orders for firms in the service sector are at their lowest level in 15 months.

Additionally, plans for capital expenditures and employment expectations are down in both the service and manufacturing sectors.

The survey also indicated that gross domestic product growth in the second quarter was 0.5 percent, only slightly above the 0.4 percent growth in the first quarter.

If this slow growth is confirmed, said an economic adviser to the BCC, the organization would likely revise its annual growth forecast downward for the second time this year, to 2 percent.

This is at odds with the April forecast by Gordon Brown, predicting 3 to 3.5 percent growth in the UK economy this year.

The BCC characterized the results of its survey as “very disturbing” and called on the Bank of England to cut UK interest rates as soon as possible.

Discuss this in the Finance Markets forums

Story link: BCC indicators points to slowing UK economy