Real-time updates on the UK economy: trends, expectations and implications from business survey data
Covid-19 has caused substantial shocks to the UK economy, highlighting a need for real-time data to analyse trends. We use monthly business survey data from the Confederation of British Industry (CBI) to document recent trends and future expectations on multiple measures of firms' activity. The majority of firms have increased their volume of business every month since April 2021 but this growth is weakening. The decline is mirrored in expectations which have also become less optimistic. There is a narrowing gap between wage growth and price growth, pointing to a period of lower real wage growth. Labour shortages are affecting firms in all sectors, with at least half of all businesses in each sector experiencing a shortage of workers. Approximately half of firms report difficulty recruiting new workers while around one in five firms report issues retaining existing staff. One in ten firms report that the UK's point-based immigration regime is causing labour shortages.
Josh De Lyon and Swati Dhingra
15 December 2021 Paper Number CEPCOVID-19-026
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This CEP Covid-19 analysis is published under the centre's Trade programme.