UK economy is on firm growth footing, latest CBI indicator reveals

The rate of economic growth strengthened in the three months to July, with business and professional services the driving force, according to the latest CBI growth indicator.

The survey of 736 businesses across the manufacturing, retail and service sectors showed a reading of +20% in the three months to July, compared with +14% in June.

This rebound was largely due to a faster pace of growth in business and professional services with manufacturers and retailers reporting growth, albeit at a more moderate pace.

Expectations remain robust, with firms anticipating that growth will strengthen a little further in the next three months (balance of +27%).

Anna Leach, CBI head of economic analysis, said: “A healthy pace of growth puts the economy on a firm footing going into the third quarter and it looks set to stay that way through the rest of this year, as low oil prices and inflation help support spending.

“Business and professional services helped lift the economy in the previous three months as they bounced back from a temporary blip last month.

“But the strength in Sterling continues to cause headaches for exporters trying to sell inside the Eurozone.”