Growth in Britain's long buoyant services industry slowed in the third quarter as domestic demand weakened A new survey by the British Chambers of Commerce (BCC) revealed that a measure of home sales fell to 17 from 27 in the second quarter. The figure represents the percentage balance of services firms reporting higher sales minus those reporting lower sales.
Export sales also declined, according to the survey, dropping to five from eight "The economic recovery remains limited,'' said David Frost, the BCC's director general. "The slowdown in the normally more robust service sector is a potentially worrying indicator.
The BCC said the Bank of England must be ready to cut interest rates if the threat of deflation grows, while the government must consider easing taxes for companies "given the acute global risks".
Although it has held rates unchanged for the past eleven months, the central bank has indicated that it is maintaining an easing bias for the time being. By comparison, the European Central Bank is maintaining a neutral bias, despite numerous calls for it to cut rates. //www.fxcentre.com