Latest news with #businessactivity
Yahoo
15 hours ago
- Business
- Yahoo
Private sector to shrink at fastest pace since pandemic
British business activity is expected to shrink at its fastest pace since the depths of the pandemic in 2020 amid growing pessimism since Labour took power. Economists warned the 'negative sentiment' had no end in sight, with activity across 'all parts' of the British economy expected to keep shrinking over the next three months, according to the Confederation of British Industry (CBI). Its latest barometer of private sector output showed businesses were still reeling from the impact of Rachel Reeves's autumn tax raid, with consumer-facing sectors hit hardest by the £25bn increase in employers' National Insurance. The response to the CBI's business barometer was the most negative since October 2020, when Boris Johnson, the former prime minister announced the second national lockdown during the pandemic. Bosses were also wary about the impact of global trade policy, even though the UK has escaped with one of the lowest additional tariffs from Donald Trump among major advanced economies. 'The outlook remains negative across the board,' the CBI said, as it warned of a toxic mix of slower growth and higher prices. 'Our surveys also suggest that headcount will be cut further in the three months to October, marking almost a year of weak hiring intentions,' it said. The decline in July means more businesses have reported a slump in output than an expansion since Labour won the general election in July last year. Expectations about future output have also dragged into negative territory since Ms Reeves's tax raid. Alpesh Paleja, the CBI's deputy chief economist, said: 'Firms continue to face testing conditions, with expectations pointing to another quarter of falling activity across the economy. 'While not worsening, the persistently negative outlook underlines the fragility of demand conditions. 'Against this backdrop, businesses continue to cite headwinds from adjusting to higher employment costs, energy prices and continued uncertainty from a volatile global environment. With few signs of recovery on the horizon, firms are focused on managing costs and streamlining processes in what looks set to be a subdued second half of the year.' It came as separate figures showed British households squirrelled away £8.8bn into banks, building societies and National Savings and Investment accounts amid signs that consumers remain cautious. The Bank of England said households' total liquid assets increased by £8.8bn in June, which was almost double the increase recorded in May and the £4.5bn average month-to-month increase in the two years before the pandemic. 'This suggests households are in the mood to save rather than spend,' said Ashley Webb at Capital Economics, adding that this 'casts a bit more doubt over [stronger] consumer spending growth' to support the economy. Erreur lors de la récupération des données Connectez-vous pour accéder à votre portefeuille Erreur lors de la récupération des données Erreur lors de la récupération des données Erreur lors de la récupération des données Erreur lors de la récupération des données
Yahoo
7 days ago
- Business
- Yahoo
US business activity rises; tariffs fuel inflation concerns
By Lucia Mutikani WASHINGTON (Reuters) -U.S. business activity picked up in July, but companies asked higher prices for goods and services, supporting economists' views that inflation will accelerate in the second half of the year mainly because of tariffs on imports. Despite the increase in activity this month, the survey from S&P Global on Thursday also showed sentiment among businesses remained downbeat, which it said "primarily reflected broad-based concerns over tariffs and cuts to state funding following recent federal government policy changes." Consumer prices increased by the most in five months in June, with solid rises in the costs of tariff-exposed goods like household furnishings and supplies, appliances, sporting goods and toys, signaling that President Donald Trump's broad import duties were starting to have an impact on inflation. S&P Global's flash U.S. Composite PMI Output Index, which tracks the manufacturing and services sectors, increased to 54.6 this month, the highest level since December, from 52.9 in June. A reading above 50 indicates expansion in the private sector. The improvement came from the services sector, where the flash PMI surged to 55.2 from 52.9 in June. Economists polled by Reuters had forecast the services PMI inching up to 53.0. The survey's flash manufacturing PMI dropped to 49.5, the first contraction since December, from 52.9 in June. Manufacturing received a bump from front-loading of activity ahead of tariffs as well as from the protectionist nature of the duties. But S&P Global noted that "any protectionist benefits of import tariffs were often outweighed by concerns over higher prices and rising costs." Economists polled had forecast the manufacturing PMI easing to 52.7. HIGHER PRICES The survey's measure of prices paid by businesses for inputs edged up to 61.9 from 61.2 in June. The price gauge for services inputs jumped to 61.4 from 59.7 in June. While the pace of price rises for manufacturing inputs slowed, nearly two-thirds of manufacturers in the survey reporting higher costs attributed those to tariffs. The survey's measure of prices charged by businesses for goods and services ticked up to 58.6 from 58.1 in June. The prices charged gauge for services increased to 58.2 from 57.2 in June. About 40% of service providers reporting higher selling prices explicitly mentioned tariffs, while just under half of their counterparts in manufacturing blamed the import duties. The increase in business activity and elevated price gauges at face value argue against the Federal Reserve resuming interest rate cuts this month. Trump is demanding the U.S. central bank reduce borrowing costs, citing among others the struggling housing market. The Fed is expected to keep its benchmark overnight interest rate in the 4.25%-4.50% range, where it has been since December, when it meets later this month. "The rise in selling prices for goods and services in July, which was one of the largest seen over the past three years, suggests that consumer price inflation will rise further above the Fed's 2% target in the coming months as these price hikes feed through to households," said Chris Williamson, chief business economist at S&P Global Market Intelligence. The survey also suggested the labor market remained stable early in the third quarter, though factories shed jobs. New orders received by businesses increased this month, though both goods and services exports declined. The weakness is likely because of trade tensions and the Trump administration's immigration crackdown. Data and anecdotal evidence have shown fewer tourists visiting this year. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
7 days ago
- Business
- Yahoo
US business activity rises; tariffs fuel inflation concerns
By Lucia Mutikani WASHINGTON (Reuters) -U.S. business activity picked up in July, but companies asked higher prices for goods and services, supporting economists' views that inflation will accelerate in the second half of the year mainly because of tariffs on imports. Despite the increase in activity this month, the survey from S&P Global on Thursday also showed sentiment among businesses remained downbeat, which it said "primarily reflected broad-based concerns over tariffs and cuts to state funding following recent federal government policy changes." Consumer prices increased by the most in five months in June, with solid rises in the costs of tariff-exposed goods like household furnishings and supplies, appliances, sporting goods and toys, signaling that President Donald Trump's broad import duties were starting to have an impact on inflation. S&P Global's flash U.S. Composite PMI Output Index, which tracks the manufacturing and services sectors, increased to 54.6 this month, the highest level since December, from 52.9 in June. A reading above 50 indicates expansion in the private sector. The improvement came from the services sector, where the flash PMI surged to 55.2 from 52.9 in June. Economists polled by Reuters had forecast the services PMI inching up to 53.0. The survey's flash manufacturing PMI dropped to 49.5, the first contraction since December, from 52.9 in June. Manufacturing received a bump from front-loading of activity ahead of tariffs as well as from the protectionist nature of the duties. But S&P Global noted that "any protectionist benefits of import tariffs were often outweighed by concerns over higher prices and rising costs." Economists polled had forecast the manufacturing PMI easing to 52.7. HIGHER PRICES The survey's measure of prices paid by businesses for inputs edged up to 61.9 from 61.2 in June. The price gauge for services inputs jumped to 61.4 from 59.7 in June. While the pace of price rises for manufacturing inputs slowed, nearly two-thirds of manufacturers in the survey reporting higher costs attributed those to tariffs. The survey's measure of prices charged by businesses for goods and services ticked up to 58.6 from 58.1 in June. The prices charged gauge for services increased to 58.2 from 57.2 in June. About 40% of service providers reporting higher selling prices explicitly mentioned tariffs, while just under half of their counterparts in manufacturing blamed the import duties. The increase in business activity and elevated price gauges at face value argue against the Federal Reserve resuming interest rate cuts this month. Trump is demanding the U.S. central bank reduce borrowing costs, citing among others the struggling housing market. The Fed is expected to keep its benchmark overnight interest rate in the 4.25%-4.50% range, where it has been since December, when it meets later this month. "The rise in selling prices for goods and services in July, which was one of the largest seen over the past three years, suggests that consumer price inflation will rise further above the Fed's 2% target in the coming months as these price hikes feed through to households," said Chris Williamson, chief business economist at S&P Global Market Intelligence. The survey also suggested the labor market remained stable early in the third quarter, though factories shed jobs. New orders received by businesses increased this month, though both goods and services exports declined. The weakness is likely because of trade tensions and the Trump administration's immigration crackdown. Data and anecdotal evidence have shown fewer tourists visiting this year.
Reuters
7 days ago
- Business
- Reuters
US business activity rises; tariffs fuel inflation concerns
WASHINGTON, July 24 (Reuters) - U.S. business activity picked up in July, but companies asked higher prices for goods and services, supporting economists' views that inflation will accelerate in the second half of the year mainly because of tariffs on imports. Despite the increase in activity this month, the survey from S&P Global on Thursday also showed sentiment among businesses remained downbeat, which it said "primarily reflected broad-based concerns over tariffs and cuts to state funding following recent federal government policy changes." Consumer prices increased by the most in five months in June, with solid rises in the costs of tariff-exposed goods like household furnishings and supplies, appliances, sporting goods and toys, signaling that President Donald Trump's broad import duties were starting to have an impact on inflation. S&P Global's flash U.S. Composite PMI Output Index, which tracks the manufacturing and services sectors, increased to 54.6 this month, the highest level since December, from 52.9 in June. A reading above 50 indicates expansion in the private sector. The improvement came from the services sector, where the flash PMI surged to 55.2 from 52.9 in June. Economists polled by Reuters had forecast the services PMI inching up to 53.0. The survey's flash manufacturing PMI dropped to 49.5, the first contraction since December, from 52.9 in June. Manufacturing received a bump from front-loading of activity ahead of tariffs as well as from the protectionist nature of the duties. But S&P Global noted that "any protectionist benefits of import tariffs were often outweighed by concerns over higher prices and rising costs." Economists polled had forecast the manufacturing PMI easing to 52.7. The survey's measure of prices paid by businesses for inputs edged up to 61.9 from 61.2 in June. The price gauge for services inputs jumped to 61.4 from 59.7 in June. While the pace of price rises for manufacturing inputs slowed, nearly two-thirds of manufacturers in the survey reporting higher costs attributed those to tariffs. The survey's measure of prices charged by businesses for goods and services ticked up to 58.6 from 58.1 in June. The prices charged gauge for services increased to 58.2 from 57.2 in June. About 40% of service providers reporting higher selling prices explicitly mentioned tariffs, while just under half of their counterparts in manufacturing blamed the import duties. The increase in business activity and elevated price gauges at face value argue against the Federal Reserve resuming interest rate cuts this month. Trump is demanding the U.S. central bank reduce borrowing costs, citing among others the struggling housing market. The Fed is expected to keep its benchmark overnight interest rate in the 4.25%-4.50% range, where it has been since December, when it meets later this month. "The rise in selling prices for goods and services in July, which was one of the largest seen over the past three years, suggests that consumer price inflation will rise further above the Fed's 2% target in the coming months as these price hikes feed through to households," said Chris Williamson, chief business economist at S&P Global Market Intelligence. The survey also suggested the labor market remained stable early in the third quarter, though factories shed jobs. New orders received by businesses increased this month, though both goods and services exports declined. The weakness is likely because of trade tensions and the Trump administration's immigration crackdown. Data and anecdotal evidence have shown fewer tourists visiting this year.
Reuters
7 days ago
- Business
- Reuters
UK firms struggle to grow as BoE rate decision approaches
LONDON, July 24 (Reuters) - British business activity grew only weakly in July and employers cut jobs at the fastest pace in five months, according to a survey that is likely to add to speculation about a Bank of England interest rate cut next month. The S&P Global UK Composite Purchasing Managers' Index (PMI), published on Thursday, slowed to 51.0 points from 52.0 in June, not far above the 50.0 level that separates growth from contraction. A Reuters poll had forecast a smaller fall to 51.8. The survey's employment gauge dropped to 45.1, its lowest since February, with businesses in part blaming the decision by British finance minister Rachel Reeves to make them pay more in social security contributions for their staff from April. "Particularly worrying is the sustained impact of the budget measures on employment," Chris Williamson, chief business economist at S&P Global Market Intelligence, said. "Higher staffing costs have exacerbated firms' existing concerns over payroll numbers in the current environment of weak demand, resulting in another month of sharply reduced headcounts in July." Worries about weak demand were also weighing on hiring decisions, S&P Global said. The BoE is expected to cut interest rates for the fifth time in 12 months on August 7 as it focuses on signs of a slowdown in the jobs market, even as inflation remains above the central bank's 2% target and rose to 3.6% in June. Williamson said Thursday's survey suggested Britain's economy was growing at a quarterly pace of just 0.1% with a risk that it could prove weaker. However, the PMI underscored the BoE's dilemma with growth in prices charged by firms speeding up for the first time since April as suppliers sought to offset some of the tax increase and higher wage bills. The PMI for the services sector slipped to 51.2 in July from June's 52.8. The manufacturing sector PMI rose for a fourth month in a row to 48.2 from 47.7 but remained in contraction territory for a 10th consecutive month.
