BusinessCompany NewsICAEW survey: Economy has reached its peak

ICAEW survey: Economy has reached its peak

Institute warns government to contain public spending as consumer dependent sectors turn pessimistic.

The UK economy may have reached the peak in its current business cycle,
according the views of accounting professionals reported in the latest quarterly
ICAEW/ORANGE UK Business
Confidence Monitor
.

According to the survey, the most recent
interest rate
rises
are beginning to have an impact on business sectors dependent on
consumer spending. Retail price inflation has risen faster than earnings in the
last 12 months to December, eroding purchasing power, the survey also found.

Furthermore, overall confidence index has fallen from +6.2 to +5.2, the
second consecutive decline in business confidence, pointing to a maturing
economic cycle.

ICAEW chief executive
Michael
Izza
said: ‘Our members have stated that confidence is falling in crucial
sectors of the economy. We’re seeing that consumer sectors have become more
pessimistic. Of major concern is the impact that the recent interest rate rises
will have on a slowing economy and on government finances.’

Further reading:

No surprise as rates left unchanged

Increase in UK business optimism

Economics: Last hurrah

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