Private sector growth: Only the retail sector grew faster than the previous rolling quarter, up 38% vs. 21% previously Photo: GLYN KIRK/AFP via Getty Images

Private sector growth in Britain slowed in the three months to January, according to the latest indicator from the Confederation of British Industry (CBI).

It was the second consecutive survey in which growth had eased, with the figure coming in at 12% from 21% in the quarter ending December.

The numbers were also the slowest growth rate in the three months to April 2021.

Only the distribution sector grew faster than the previous rolling quarter, up 38% against 21% previously. By contrast, growth in manufacturing output slowed, up just 14% from 29%, and volumes in business and professional services also slowed, from 16% to 9%.

Consumer services activity fell for the first time in the three months to June 2021, a reading of -23% from +23% in December, bearing the brunt of Plan B restrictions and the general caution of ‘Omicron.

Private sector activity is expected to grow at a similarly modest pace over the next three months at 10%, the CBI said, marking the weakest growth expectations for the quarter through February 2021.

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The measure was based on CBI survey responses from 477 companies between December 20, 2021 and January 17, 2022. The latest survey was the first to fully reflect the impact of the Omicron variant of the COVID-19 restrictions and the Plan B announced in December.

Looking ahead, manufacturers and business and professional services companies expect a faster growth rate over the next three months, at 23% and 15% respectively. This despite increasing cost pressure.

Distribution companies expect a slight deceleration in growth (+33%), while activity in consumer services is expected to fall at an even faster pace (-53%).

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“Private sector growth weakened significantly across most sectors in the quarter ending January, and expectations for the next three months have eased significantly,” said CBI senior economist Alpesh Paleja.

“Consumer-facing businesses will also have to deal with an increasing squeeze on household budgets, as rising energy prices and, more broadly, rising inflation begin to take their toll. extending the Warm Home rebate and reducing VAT on consumer energy bills for 2022 can help ease the pressure on the most vulnerable.

He added: “To ensure that businesses are well placed to support the recovery and be globally competitive, it is essential to maintain and expand their access to the stimulus loan program, as is the compensation of energy-intensive industries for the indirect costs of emissions.”

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