Roger Bootle, economic adviser to Deloitte, warned UK businesses that their profit growth would drop severely this year and continue to fall 12 months later due to a slowdown in consumer spending and weakening global demand.
Bootle predicted that profit growth would decline to 5% in 2005 from 8.2% in 2004 and to 4.5% in 2006.
He said that manufacturing faced ‘the hurdle of weakening global demand’, and that the economy would stall due to a slide in spending and a slowdown in the housing market.
‘Economic growth looks likely to have peaked in this cycle. And just as profits growth followed GDP growth on the way up, it is sure to follow it back down again.’
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