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Inflation hitting UK businesses, too - PMI

Tuesday, December 05, 2017 - 01:53

Britain's dominant services sector lost some momentum in November while prices charged by companies rose at their fastest pace in nearly 10 years. As David Pollard reports, the latest economic blow comes a day after the Irish border row thwarts May's bid to clinch a Brexit trade deal.

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British consumers are under pressure from rising prices ... So too it seems are British businesses. The November PMI reading for UK services shows less growth in activity than most forecast. The bigger news, according to the survey gatherers, is that prices companies charged hit their highest level - in nearly ten years. As they pass on the rising cost of materials. (SOUNDBITE) (English) FIDELITY INTERNATIONAL, INVESTMENT DIRECTOR, TOM STEVENSON, SAYING: There is a real inflation problem in the UK at the moment. So I think the outlook for growth in the U.K. remains difficult. A retail survey on Monday says spending rose by annual 2.8 per cent in November - that's less than inflation for two months in a row. While another report points to UK new car sales on course to their first annual drop since 2011. They slumped 11.2 percent in November - their eighth month of decline. (SOUNDBITE) (English) FIDELITY INTERNATIONAL, INVESTMENT DIRECTOR, TOM STEVENSON, SAYING: Consumers are just reining back their enthusiasm for making major purchases like a car. The second issue is the diesel emissions scandal which has really hit that part of the car market. At the same time, there is of course Brexit. UK prime minister Theresa May left talks in Brussels on Monday with no agreement on moving Britain on to full trade negotiations .... In what could be another dent to the mood on the high street. SOUNDBITE (English) 61-YEAR-OLD COMPANY DIRECTOR FROM SCOTLAND AND LONDON RESIDENT, MELFOT CAMPBELL, SAYING: We voted that way, some of us like it, some of us don't. But we just need to move on and get to a sensible deal with them. SOUNDBITE (English) 74-YEAR-OLD RETIRED LONDON RESIDENT, CAROLINE HAYIM, SAYING: We have to see progress, otherwise we're going to be in no man's land. It's very worrying. Payments firm Barclaycard says confidence in household finances fell from 64 per cent to 56 per cent. That was in November. While in December, the traditional Christmas rush is, for some shoppers at least, more hesitation than haste.

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Inflation hitting UK businesses, too - PMI

Tuesday, December 05, 2017 - 01:53