The coalition government led by David Cameron has been criticised for sticking to a strategy of austerity even though the country was expected to suffer a triple dip recession in early 2013. It was also stripped of its prized AAA credit rating in February 2013.
British service sector hiring at fastest rate since 2007
British service-sector firms are hiring new staff at the fastest rate in six years and are planning to ramp up investment as the country’s economic recovery gathers momentum, a survey showed on Tuesday.
In the three months to November, a balance of 41 per cent of consumer services firms and 28 per cent of business and professional services companies said their staff numbers increased, the survey by British business lobby CBI showed.
The Bank of England is closely monitoring the health of the labour market and has said it will consider raising its record-low interest rates once unemployment falls to 7 per cent.
The BOE is also keeping a close eye on investment by businesses, which it says is needed to bolster the recovery.
The CBI survey showed service-sector firms planned to boost investment in the coming year. Business and professional services firms’ expectations of business expansion were at the highest level since May 2004.
The service sector is the driving force of Britain’s economy, accounting for about 75 per cent of economic output.
Business volumes in the consumer services subsector rose at the quickest pace since May 2007, the survey found, with firms including hotels and travel agencies saying trade far exceeded expectations.
Higher consumer spending has been credited with kick-starting the economic recovery earlier this year.
“Both consumer and business-facing service firms finally seem to be feeling the benefit of growing confidence and spending within the UK and globally,” said Stephen Gifford, director of economics at CBI.
The CBI, which represents some 240,000 businesses that employ about a third of the British workforce, spoke to 154 service-sector firms between October 25 and November 13 for its survey.