London Daily

Focus on the big picture.
Sunday, Jun 01, 2025

UK private sector shrinks for the eighth consecutive quarter

UK private sector shrinks for the eighth consecutive quarter

The CBI expects the economy will return to growth in the next quarter - but warned the UK is "skirting stagnation-like conditions rather than delivering the strong, sustainable growth we need".
The UK's private sector has shrunk for the eighth consecutive quarter.

That is according to data from the Confederation for British Industry, which said its latest snapshot of the sector showed "signs of green shoots" - with projections that UK industry will return to growth in the next quarter.

The organisation's lead economist, Alpesh Paleja, said the expected return to growth was "encouraging" and supported other data showing some resilience in economic activity.

"But let's be clear - at best, this illustrates an economy skirting stagnation-like conditions rather than delivering the strong, sustainable growth we need," he warned.

The CBI data showed that activity in the UK private sector contracted by around 4% in the three months to March - the eighth consecutive quarter of decline, but the mildest drop since July last year.

The main driver was a weak services sector - the survey showed an 11% drop in consumer services volumes.

Distribution activity increased slightly while manufacturing contracted, albeit at a slower pace over the quarter.

Chancellor Jeremy Hunt announced plans to deliver growth in his spring budget, including increased childcare provision to help parents get back to work.

The Office for Budget Responsibility (OBR) also confirmed the UK economy is on track to avoid a technical recession, which means two consecutive quarters of decline.

But Mr Palega said the UK is still facing "considerable economic headwinds".

"Inflation remains stubbornly high and, while businesses and consumers can expect lower energy prices to feed through later in the year, the pressures on household budgets will weigh on consumer spending," he said.
Newsletter

Related Articles

0:00
0:00
Close
Hegseth Warns of Potential Chinese Military Action Against Taiwan
OPEC+ Agrees to Increase Oil Output for Third Consecutive Month
Jamie Dimon Warns U.S. Bond Market Faces Pressure from Rising Debt
Turkey Detains Istanbul Officials Amid Anti-Corruption Crackdown
Taylor Swift Gains Ownership of Her First Six Albums
Bangkok Ranked World's Top City for Remote Work in 2025
Satirical Sketch Sparks Political Spouse Feud in South Korea
Indonesia Quarry Collapse Leaves Multiple Dead and Missing
South Korean Election Video Pulled Amid Misogyny Outcry
Asian Economies Shift Away from US Dollar Amid Trade Tensions
Netflix Investigates Allegations of On-Set Mistreatment in K-Drama Production
US Defence Chief Reaffirms Strong Ties with Singapore Amid Regional Tensions
Vietnam Faces Strategic Dilemma Over China's Mekong River Projects
Malaysia's First AI Preacher Sparks Debate on Islamic Principles
White House Press Secretary Criticizes Harvard Funding, Advocates for Vocational Training
France to Implement Nationwide Smoking Ban in Outdoor Spaces Frequented by Children
Meta and Anduril Collaborate on AI-Driven Military Augmented Reality Systems
Russia's Fossil Fuel Revenues Approach €900 Billion Since Ukraine Invasion
U.S. Justice Department Reduces American Bar Association's Role in Judicial Nominations
U.S. Department of Energy Unveils 'Doudna' Supercomputer to Advance AI Research
U.S. SEC Dismisses Lawsuit Against Binance Amid Regulatory Shift
Alcohol Industry Faces Increased Scrutiny Amid Health Concerns
Italy Faces Population Decline Amid Youth Emigration
U.S. Goods Imports Plunge Nearly 20% Amid Tariff Disruptions
OpenAI Faces Competition from Cheaper AI Rivals
Foreign Tax Provision in U.S. Budget Bill Alarms Investors
Trump Accuses China of Violating Trade Agreement
Gerry Adams Wins Libel Case Against BBC
Russia Accuses Serbia of Supplying Arms to Ukraine
EU Central Bank Pushes to Replace US Dollar with Euro as World’s Main Currency
Chinese Woman Dies After Being Forced to Visit Bank Despite Critical Illness
President Trump Grants Full Pardons to Reality TV Stars Todd and Julie Chrisley
Texas Enacts App Store Accountability Act Mandating Age Verification
U.S. Health Secretary Ends Select COVID-19 Vaccine Recommendations
Vatican Calls for Sustainable Tourism in 2025 Message
Trump Warns Putin Is 'Playing with Fire' Amid Escalating Ukraine Conflict
India and Pakistan Engage Trump-Linked Lobbyists to Influence U.S. Policy
U.S. Halts New Student Visa Interviews Amid Enhanced Security Measures
Trump Administration Cancels $100 Million in Federal Contracts with Harvard
SpaceX Starship Test Flight Ends in Failure, Mars Mission Timeline Uncertain
King Charles Affirms Canadian Sovereignty Amid U.S. Statehood Pressure
Trump Threatens 25% Tariff on iPhones Amid Dispute with Apple CEO
Putin's Helicopter Reportedly Targeted by Ukrainian Drones
Liverpool Car Ramming Incident Leaves Multiple Injured
Australia Faces Immigration Debate Following Labor Party Victory
Iranian Revolutionary Guard Founder Warns Against Trusting Regime in Nuclear Talks
Macron Dismisses Viral Video of Wife's Gesture as Playful Banter
Cleveland Clinic Study Questions Effectiveness of Recent Flu Vaccine
Netanyahu Accuses Starmer of Siding with Hamas
Junior Doctors Threaten Strike Over 4% Pay Offer
×