UK growth is starting to slow down, says new CBI report

The UK economy has recorded spectacular growth levels over the past few months, but a new report by the Confederation of British Industry now suggests that the pace is starting to slow down.

The CBI's growth indicator for March showed that the economy is growing at its slowest rate in eight months, due largely to a slump in the retail, business and consumer and professional services sectors.

The group's survey involved 622 respondents across manufacturing, retail and services and recorded strong growth in output volumes, with a balance of +19%, down from a record +32% in February. Nevertheless, firms remain optimistic about the outlook for output growth over the next quarter with the expectations balance at +36%, largely driven by sustained growth in the services sector.

Anna Leach, CBI Head of Economic Analysis, commented on the findings published in the group's report:

"Although growth has slowed from record levels last month, it remains strong and firms are optimistic it will pick up again in the next quarter.

"As this year progresses, we expect further increases in business and consumer confidence. Productivity and earnings should also start to recover.

"However, global developments continue to pose a risk to UK growth, not least the risk of renewed problems in the Eurozone. And although our direct trade and financial links with the Ukraine and Russia are relatively small the crisis could have potential implications for global commodity prices, which may impact inflation in the UK."