THE SUNDAY TIMES: BUSINESS is warning of a “toxic mix” for Britain’s economy of sharply weaker growth and profits alongside powerful inflationary pressures. This poses a growing dilemma for the Bank of England, which held off cutting interest rates last week but is widely expected to cut next month.
According to Ernst & Young, profit warnings from UK-quoted companies have hit their highest level since the final quarter of 2001, when the economy was rocked by the fallout from the September 11 terrorist attacks on America.
Meanwhile, this week’s British Chambers of Commerce (BCC) quarterly economic survey is said by insiders to be “flashing red”. Output, orders and expectations are all down sharply, except for firms’ expectations of price rises, which are at a record high.
A YouGov poll of more than 2,100 voters for today’s Sunday Times shows that people are gloomy about economic prospects, with 34% expecting a slowdown, 21% no growth at all, and 22% a recession. Firms face toxic mix of rising prices and falling profits >>> By David Smith
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