Business sceptical of Brown's growth targets
UK businesses think that chancellor Gordon Brown's growth targets for the next year are unlikely to be met, according to two recent surveys.
Link: In depth: The pre-Budget
In the pre-Budget report, chancellor Brown forecast that following growth of 1.6% this year, the economy’s growth rate would accelerate to between 2.5% and 3% next year. However a report from the Confederation of British Industry showed that the services sector remains deeply pessimistic over the future of the UK’s economy.
The CBI survey showed that 31% of respondents in consumer services, such as hotel and restaurants, expected deteriorating economic conditions over the short term, compared to only 17% when the same survey was conducted in August. Professional services saw a pick-up since August but most in this sector still expect the economy to worsen in the next three months.
Another report by BDO Stoy Hayward, using its optimism index, said that a growth rate of only 1.2% was expected during most of next year, with a recovery unlikely until at least next autumn.