Economic growth reaches ‘record high’, says CBI

Economic growth reached a record high in May, posting the highest reading since data began in 2003, according to the latest CBI growth indicator.

The survey of 726 respondents across the manufacturing, retail and service sectors registered record high growth in business activity, with a balance of +35%, up from +25% in April.

The CBI’s growth indicator suggests the UK economy has continued to perform strongly going into the second quarter of 2014, with the pace of growth predicted to remain firmly above average for the coming quarter as well (a balance of +30 for expected output growth for the next three months).

Growth strengthened in retail sales and business volumes for the business & professional and consumer services sectors in the three months to May, with manufacturing output continuing to grow at the same solid pace as the previous two months.

Katja Hall, CBI deputy director-general, said: “The UK economy is performing strongly and this is thanks to rising business and consumer confidence, better credit conditions at home and improving global economic conditions.

“What’s encouraging is that growth is becoming more broad-based, with solid increases in business investment over the past year. This bodes well for the year ahead.

“But there are risks to the UK’s outlook from global developments, including the possibility that the situation in Ukraine and Russia could impact on global commodity prices. And with the Eurozone crisis still far from being fully resolved, the UK continues to be exposed to a prolonged period of subdued activity in the region.”