THE UK economy is set for sluggish growth at best, according to the latest Business Trends report by accountants and business advisors BDO today.
BDO’s Inflation Index dropped by just 0.1 points in April – suggesting that the previously welcome downward trend in inflationary expectations over the past nine months is coming to an end.
Worryingly, this levelling off sees the inflation Index at 102.9 – well above the average trend level of 100 or 2.7% and suggesting that inflation is unlikely to reach the Bank of England’s 2% target by the end of the year.
Inflationary pressures and low growth in annual earnings at just 1.6% were “critically” undermining consumer spending power, the survey said.
The BDO Employment Index improved in April, but “barely edged into growth territory”.
The survey said: “While there is a more positive view of the economy than six months ago, findings show that business people predict protracted slow growth for the UK economy for the remainder of 2012.”