People walk along New Bond Street in London, Britain, June 15, 2020. REUTERS / Henry Nicholls / File Photo

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LONDON, July 31 (Reuters) – British businesses do not expect any growth over the next three months, as rising living costs dampen consumer demand, a monthly survey said. showed on Sunday.

The Confederation of British Industry (CBI) said members reported above-average growth in the three months to the end of July – slightly faster than the three months to June – but expected this to decrease in the coming months.

“As companies and consumers continue to be affected by rising prices, private sector activity has come to a near standstill,” said CBI economist Alpesh Paleja.

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The Bank of England is expected to announce its biggest rate hike since 1995 on Thursday, raising rates to 1.75% from 1.25% to tame inflation already at its highest. in 40 years is 9.4%. read more

However, the BoE has warned that the UK economy is likely to be in recession by the end of the year, when the regulated energy tax rate is increased by 40% on consumers in October, and forecast the economy will contract slightly in the coming months. next year.

The US contracted in both the first and second quarters of this year, meeting a commonly used definition of a recession. read more

Last week, the International Monetary Fund forecast Britain would see the weakest growth of any major economy other than Russia next year.

The CBI said its monthly output balance, based on a survey of manufacturers, service companies and retailers, rose to +8 in the three months to July from +5 in the three months to July. six. July’s projected balance for the next three months is zero, up from June’s -3.

Manufacturers expect the current slowdown in growth to continue, while consumer services and retail businesses decline in sales, and business services are expected to slow, the CBI said. , CBI said.

“This is not surprising, as strong inflation has pushed real wages down sharply and consumer confidence is at an all-time low,” it added.

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Reporting by David Milliken; Editing by David Holmes

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