Business investment is having its worst run since the economic crash of 2008, new figures out today have revealed.
Data published by the Office for National Statistics showed that investment declined for the third consecutive quarter between July and September.
The 1.1 per cent fall on the previous quarter comes after a number of leading UK businesses warned that Brexit was having an adverse effect on investment.
An alliance representing thousands of British firms also issued a statement accusing politicians of being too busy with infighting to secure a smooth Brexit.
It is the worst business investment run since the downturn ten years ago and coincides with the Bank of England cutting its UK growth forecast due to Brexit uncertainty.
The ONS figures cover private and public sector investment, including those in key sectors such as transport, buildings and technology.
The ONS released other figures on the economy showing that:
- The current account deficit – the difference between money coming in and out of the UK – grew to £26.5bn in quarter three, compared with a £20bn quarter two deficit.
- The economy grew by 0.6 per cent in the third quarter against the second, in line with estimates.
- The Government’s November borrowing of £7.2 billion was the lowest since 2004 and down £0.9bn on last year.
- Households spent more money than they brought in for the eighth quarter in a row, raising fears about a future fall in consumer spending and its effect on the economy.
ONS statistician Rob Kent-Smith said the long-term business investment picture would remain ‘subdued,’ at least until there was more clarity over Brexit.
Bank of England governor Mark Carney said uncertainty over what form the UK’s departure from the EU would take had ‘intensified considerably’ over the past month.
A number of major businesses, including Jaguar Land Rover, Airbus, Nissan and BMW, have all said that Brexit threatens investment levels in UK businesses
Representatives of a cross section of UK firms also issued a joint statement this week criticising politicians for squabbling rather than dealing with Brexit. They were:
The British Chambers of Commerce.
The Confederation of British Industry.
The EEF, which represents manufacturers.
The Federation of Small Businesses.
They said there was no time to prepare for the effects of a hard Brexit but lack of progress in Westminster means that the risk of crashing out is increasing.
The statement added that their members have been ‘watching in horror’ as politicians focused on factional disputes rather than helping businesses.