Published by Global Banking & Finance Review®
Posted on December 2, 2025
2 min readLast updated: January 20, 2026
Add as preferred source on GoogleThe UK's private sector predicts weak growth in the coming months due to cautious consumer spending and cost pressures, as reported by the CBI.
LONDON, Dec 2 (Reuters) - Britain's private sector expects output to slide over the next three months in their gloomiest outlook since May, as cautious consumer spending and cost pressures continue to weigh on businesses, an industry survey showed on Tuesday.
The Confederation of British Industry said the output expectations gauge of its surveys of the services sector, manufacturers and retailers for the three months to February fell to a net balance of -27 in November, down from -20 in October.
Private sector activity fell at the fastest pace since August 2020 in the three months to November to -35, down from -32 a month earlier.
British finance minister Rachel Reeves announced billions of pounds in tax rises in her annual budget on November 26 that will affect workers, people saving for a pension and investors.
"Growth expectations weakened in November, some of which may be down to jitters ahead of last week's Budget. Businesses tell us that much of the month passed in limbo ahead of that, with big discretionary spending and investment on hold," Alpesh Paleja, deputy chief economist at the CBI, said.
"However, this only compounded the headwinds to growth that have been apparent throughout the year: cautious spending behaviour by households and clients making demand conditions tepid, against a backdrop of persistent cost pressures for corporates."
Firms expected to cut hiring in the three months to February 2026, the CBI said, reflecting the impact of higher payroll costs ordered by Reeves in the October 2024 budget and the upcoming Employment Rights Bill.
The CBI data was based on a survey of 909 companies between October 24 and November 13.
(Reporting by Suban Abdulla, editing by Andy Bruce)
Business investment involves the purchase of goods and services by businesses to enhance their operations, which can include purchasing equipment, buildings, or technology.
Hiring expectations refer to the anticipated changes in employment levels within businesses, often influenced by economic conditions and business outlook.
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