UK services firms remain under pressure, with confidence and activity slipping again in August, according to the CBI. High costs and weak demand are squeezing profits, hiring and investment, while the Bank of England remains wary of sticky inflation.
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- Britain’s services sector is still struggling, with firms reporting another drop in confidence and activity in August, the Confederation of British Industry (CBI) said. While the fall was less severe than in May, optimism is well below levels seen a year ago.
- Companies continue to face high costs but are raising prices more slowly than earlier in the summer, a development that keeps the Bank of England cautious on services inflation. The CBI noted weaker demand and rising costs are already weighing on hiring, investment and profits.
- Deputy chief economist Alpesh Paleja urged the government to support growth by avoiding further tax hikes and reconsidering new worker rights plans that could add to business expenses. However, finance minister Rachel Reeves is expected to push ahead with tax rises in the autumn budget to meet fiscal targets.
- Looking ahead, services firms expect activity to remain subdued over the next three months, though the pace of decline is likely to be less sharp than in previous quarters
UK services confidence slips again in August, CBI warns on costs and weak demand
