Commenting on data, David Kern, Chief Economist at the British Chambers of Commerce (BCC), was reported as saying: “The further sharp decline in business investment signals serious threats to Britain’s long-term recovery. In the face of weak demand and mounting financial pressure, businesses have little choice but to cut investment and stock.
“Unless this trend can be reversed, the long-term productive capacity of the economy will be damaged, and the country will lack the necessary capital stock to sustain a recovery. This must be kept in mind when the government plans a fiscal strategy to repair the public finances. It is critical not to impair the business sector’s ability to invest and create wealth”.
Declines in business investment occurred in most industries, with the quarterly fall in business investment mainly due to reduced capital spending by industries classified as private sector manufacturing (down 16.8%), private sector non-manufacturing (down 9.7%) and public corporations non-manufacturing (down 7.2%).