UK economy: interest rates soar, and business optimism falls
UK economy: Companies have cut back on employing staff, and a survey finds that manufacturing output is at its lowest since May 2020 as supply problems continue.
Business optimism plunged last month amid jitters over the slowing UK economy, exhausting business plans to employ more staff, according to a survey of around 4,000 companies.
Optimism has fallen, with increased interest rates and weak international demand contributing to dismay across the services and manufacturing units.
The latest Business Trends news from accounting company BDO showed that employers’ hiring plans have fallen for the first time in six months.
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It even showed manufacturing output dropped to its lowest point since the early days of the UK Covid-19 lockdown, in May 2020, with continuing supply problems taking a toll.
China’s stuttering recovery and a weak prediction for growth in the eurozone have contributed to the problems faced by UK exporters, which missed out on much of the boom in business coming out of the Covid-19 outbreak.
Economists have predicted an international slowdown in the second half of this year in reply to higher borrowing costs set by the Bank of England, the US Federal Reserve and the European Central Bank.
The report, a poll of polls across conducting business and manufacturing pulse checks, highlights the economic headwinds, as the Bank of England lifted interest rates to their highest level in 15 years on Thursday with indications of more to come to rein in inflation.
