3 September 2001, 10:16 UK service sector starts to feel impact from slowdown in manufacturing - CBI
LONDON (AFX-UK) - The UK service sector is starting to feel the
impact from the slowdown in the manufacturing sector, according to the
latest joint survey from the Confederation of British Industry and
Deloitte and Touche.
The survey found that profitability and optimism fell at the
fastest pace since November 1998.
Digby Jones, CBI's Director-General, said it is now clear that the
economic slowdown facing the UK has spread beyond internationally
exposed sectors.
"We are seeing weakness in consumer-related service sectors and in
intensifying squeeze on business and professional services companies,"
he said.
He called on the Bank of England to cut rates but added that lower
rates alone is not the solution.
"The government must show it understands the serious threat to job
creation. From the Climate Change Levy to restrictive employment
legislation, this is no time to add further burdens to business," he
said.
Economic adviser to Deloitte and Touche, Roger Bootle, said the
survey supports the view that the UK economy is slowing sharply.
"The deterioration in sentiment in business and professional
services is particularly marked. It affirms what we know from other
sources. The consumer may still be active but business is becoming
alarmed about economic prospects. If the MPC needed evidence to cut
rates further, this survey provides it," Bootle said.
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