UK Businesses Expect 0 Percent Growth Over Next 3 Years - CBI

British businesses do not expect any growth in the next three months as the rising cost of living squeezes consumer demand, a monthly survey showed on Sunday.

The Confederation of British Industry (CBI) said its members recorded above-average growth in the three months to the end of July - slightly faster than in the three months to the end of June - but expect this to slow in the coming months. "Private sector activity has almost ground to a halt as firms and consumers continue to be hit by rising prices," CBI economist Alpesh Paleja said. The Bank of England is expected to announce its biggest rate hike since 1995 on Thursday, raising interest rates from 1.25% to 1.75% to rein in inflation, which has hit a 40-year high of 9.4%. But the BoE warned in October that the UK economy could contract this year as a 40% increase in regulated energy tariffs hit consumers, and predicted the economy would contract slightly next year. The United States shrank in both the first and second quarters of this year, meeting one of the commonly used definitions of recession. Last week, the International Monetary Fund predicted that Britain will show the weakest growth next year among major economies outside Russia. The CBI said its monthly output balance, based on surveys of manufacturers, service companies and retailers, rose from +5 in the three months to June to +8 in the three months to July. The expected balance in July for the next three months rose to zero from -3 in June.