Business investment fall adds to GDP woes
Friday 22 August 2008
Fears that the UK economy is sliding into recession have been fuelled with the release of the latest figures on business investment, which fell by nearly £700m in the second quarter of 2008.
The poor figures increase the chances that the official GDP growth figures for the second quarter of the year, due to be revised today, will be lower than the previously published figure of 0.2 per cent, and edging ever closer to the negative territory many economists expect to see by the end of the year.
The Office for National Statistics reported that investment in the construction sector was especially badly hit in the current slowdown, falling almost 14 per cent, or £113m – while manufacturing investment slid 5.8 per cent to £3.53bn compared with the previous quarter. Better performances in the services sector left the overall picture slightly brighter: total investment between April and June was £35.8bn, 1.9 per cent lower than the first three months of the year.
David Kern, economic adviser to the British Chambers of Commerce, said: "It confirms that businesses are being forced to retrench in the face of the economic slowdown. The worsening economic pressures emphasise the need for the Monetary Policy Committee and the Government to take the correct measures to counter the threat of recession."
Hetal Mehta, senior economic adviser to the Ernst & Young ITEM Club, added: "Businesses are absorbing a large proportion of the high input costs they have been facing, which indicates that profitability is likely to be severely dented, so making it even harder for firms to find the finances for investing."
Emergency call 'started off dumb, but got pretty serious'
Britain First criticised for using actress's memory to draw attention to their 'hate-filled home page'
Thought you'd seen it all after the Jeremy Paxman interview?
Greatest mystery about the hit BBC1 show is how it continues to be made at all, writes Grace Dent
"History is violent," says the US Army tank commander Don "Wardaddy" Collier
Striker's four-month ban for biting an opponent expires on Friday
Argentinian scored 'rabona' wonder goal for Tottenham in Europa League – see it here
- 1 This 'woman calls police to order pizza' story isn't going where you're expecting
- 2 Watch what happened when food critics were unknowingly served McDonald's
- 3 Jimmy Carr's controversial Oscar Pistorius joke goes a bit too far at the Q Awards
- 4 Ottawa shootings: Bruce MacKinnon's cartoon is the perfect tribute to soldier Nathan Cirillo
- 5 Of course, teenage girls need role models – but not like beauty vlogger Zoella
Isis releases first video showing the stoning of woman accused of committing adultery as her father shouts 'don't call me Dad'
This 'woman calls police to order pizza' story isn't going where you're expecting
FCKH8: YouTube reinstates provocative anti-sexism video showing young girls swearing
Diwali: What is the festival of lights – and how is it celebrated around the world?
Jimmy Carr's controversial Oscar Pistorius joke goes a bit too far at the Q Awards
Of course, teenage girls need role models – but not like beauty vlogger Zoella
Cameron is warned 'no possibility' of UK reducing immigration and that bid to bring in quota on migrant workers would be illegal
Support for EU membership 'at highest level since 1991' with most Brits wanting to stay 'in'
Thousands with degenerative conditions classified as 'fit to work in future' – despite no possibility of improvement
Residents should throw a street party and mix with immigrant neighbours, councils told
Attacks on 'Ukip Calypso' show how skewed people’s priorities are
iJobs Money & Business
£24000 - £28000 per annum + bonus & benefits: Ashdown Group: IT Business Syste...
£50000 - £90000 per annum + benefits: Ampersand Consulting LLP: Markit EDM (CA...
£100 - 125k: Guru Careers: A CTO / Chief Technology Officer is needed to join ...
Competitive (DOE): Guru Careers: A COO / Chief Operating Officer is needed to ...