Business confidence plummets

By JANE PADGHAM
Updated:

 

LONDON and the South-East are suffering one of the steepest falls in manufacturing business confidence in the entire country. With Eastern England and the South-West they lead a nationwide deterioration that saw confidence plummet over the past four months at its fastest rate since January 1999.

The decline is blamed on global economic slowdown and a continuing squeeze of manufacturers' margins.

Sudhir Junankar, associate director of economic analysis at the Confederation of British Industry, which published the findings, said: 'For the first time since the UK economy slowed down during 1999, firms consider uncertainty about demand to be the key constraint on their investment plans. With inflation prospects good, this gloomy picture across most regions suggests there is nothing to stop a quarter-point cut in interest rates this week.'

The survey showed that employment among London's manufacturers fell at a steeper rate than for Britain as a whole for the fourth successive survey.

Across the Atlantic, US productivity in the first quarter posted its first decline for six years. Productivity dipped by 0.1%, driving unit labour costs 5.2% higher. The figures reinforced the view that America's economic miracle is well and truly over.

The news triggered knee-jerk selling of the dollar before sterling settled down around $1.4340. The euro was slightly weaker at 88.75 US cents and 61.90p.

In Germany, official figures showed unemployment rose in April for the fourth month in a row. The jobless total rose 6,000 to 3.9m.

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