The latest quarterly survey from the Confederation of British Industry (CBI) has highlighted a significant dip in business confidence within the UK's services sector.
The report, which is a key indicator of economic health, found that optimism has waned, with firms citing rising costs and sluggish consumer demand as the primary headwinds.
Companies across professional, consumer, and business services reported increased labour costs and a difficult trading environment.
This finding is particularly concerning as the services sector is a dominant part of the UK economy.
The results underscore the ongoing challenges for British businesses to maintain profitability and growth in the face of inflationary pressures and a cautious consumer base.
The CBI's findings suggest that while the UK may have avoided a recession, the path to a robust recovery is far from smooth.
This sentiment is also reflected in other recent data, such as a report from the British Retail Consortium that indicated food inflation has continued to rise.
The combination of these factors paints a picture of a persistent cost-of-living squeeze that is impacting both consumers and the businesses that serve them, slowing down economic activity and dampening investor sentiment.
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