Bank of England – agents’ summary of business conditions

Activity had generally grown steadily on a year earlier, alongside rising real incomes and resilient consumer confidence. However, manufacturing output growth had slowed as the strength of sterling and sluggish world growth has adversely affected export supply chains.

Corporate credit availability had increased slightly further for many contracts, although some very large companies reported that risk appetite in corporate debt markets had eased back a little recently. Credit demand had remained subdued, reflected in high levels of cash holdings among companies.

Employment intentions has eased overall, reflecting some increased uncertainty about business prospects and a greater focus on raising productivity to offset expected increases in labour costs. However, an increasing number of contacts reported that low inflation had started to hold back wage growth.

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