JUMP IN MANUFACTURERING The jump in activity comes from after the PMI surveys for the manufacturing and construction sectors showed an equally impressive performance to services. The surveys painted an unduly optimistic picture at the start of the year, but are still considering one of the best indicators of what official figures will show. The positive performance of all three sectors of the economy has led economists to raise growth forecasts. A quarterly growth tare of 0.5% in the final quarter would mean a steady improvement in GDP growth this year for the UK, which has risen . 0.1% point each quarter from 0.2% at the start of 2017. The economy expanding by 0.5% would also be higher than the Bank of Englands forecast of 0.4%
500,000 UK BUSINESSES IN DISTRESS Nearly half a million British businesses are in “significant financial distress” in what Begbies Traynor described as the calm before the storm. The number of businesses experiencing financial distress had reached “unprecedented” levels over the past 12 months. Many had “overstretched themselves” taking too many risks after being lulled into a false scene of security by the continued low interest rate environment. There were 448,011 businesses across the UK suffering significant financial distress between July and September, an increase of 27% compared with the same period last year, it said. Begbies Traynor defines businesses as having “significant” financial problems if they have minor county court judgments recorded against them, a sign they are struggling to pay bills.
RETAIL SALES FALL SHARPLY British retail sales unexpectedly fell in September, dragging quarterly growth down to its weakest annual rate since 2013, as demand among shoppers wavers in the face of rising prices at the till.Official figures showed that the volume of retail sales in September fell by 0.8% compared with August, below the expectations of a 0.1% fall. This meant that for the third quarter as a whole, retail rose 1.5% compared with the same three months period in 2016, down from 2.5% in the second quarter. This was its its weakest pace in four years.
EMPLOYMENT AT RECORD HIGH Unemployment fell to a 42 year low in the three months to June as the labour market continued to set records in defiance of concerns about Brexit. Although wage growth remained disappointing, extending the squeeze on household incomes for a third month, the employment rate hit a record high.Unemployment has dropped to 4.4%, the lowest since 1975 and below the Bank of Englands estimate of the level at which wage inflation will start to build.