The latest Bank of England Agents’ Summary of business conditions has been published. The key highlights for February 2018 are:
- Growth in activity had held steady at a modest pace. Professional services firms had reported a pickup in growth; goods export volumes had strengthened, construction output growth had continued to slow.
- Investment intentions had remained positive, but mainly reflected investment to maintain business activity.
- Recruitment difficulties had remained at an elevated level, and pay growth had picked up.
Consumer spending growth had changed little. Growth in retail sales values had been broadly steady, but within that there was downward pressure on sales of furniture and homewares. In addition, the market for new cars remained challenging
Manufacturing output growth had remained moderate. Export volumes growth had increased, supported by strong global demand and the fall in sterling. The latter had led to some, albeit still limited, switching from overseas to cheaper, domestically produced goods.
Housing market activity remained subdued with transactions steady at a low level, reflecting weak supply and demand. Within that, the new-build and rental sectors were buoyant, pushing up prices and rents. Housing demand was particularly weak in London and the South East, especially for the most expensive properties. The rise in Bank Rate had little discernible impact on demand as mortgages remained cheap and readily available.
