UK faces ‘stagflation’ warning amid rising costs and faltering growth The UK’s private sector grew slightly in the first weeks of the year, but business confidence kept falling amid warnings of job cuts and rising inflation, according to a survey of firms.
Economists warned that the UK is facing a period of so-called “stagflation”, a period where prices are rising but economic growth and employment are stagnant.
While the figure is a three-month high, and came in ahead of economist expectations, businesses taking part in the poll said they were still concerned about cuts to employment amid falling sales.
The reading will add to concerns of lagging economic growth and a weakening jobs market after Chancellor Rachel Reeves raised employment taxes for businesses in the October Budget.
The uptick in activity was largely down to growth in the service economy, which makes up the majority of Britain’s private sector, while the smaller manufacturing industry contracted slightly.
