Business investment is encountering an all-time low phase with the declining figures for three consecutive quarters. According to data, this is the worst downturn in terms of economic status since 2009. Both the public and private sectors contribute to business investment that includes buildings, transport, and technology.
The ONS or Office for National Statistics has stated that the business investment has depleted by 1.1% in the period between July and September in comparison to the quarter before that. On the other hand, it has also mentioned the borrowing of government has fallen in November and touched £7.2 billion, which is £0.9 billion lesser than the amount borrowed the previous year. In fact, the figure in 2018 is the lowest figure exhibited in November in the last 14 years.
Some of the prominent businesses including Nissan, Jaguar Land Rover, BMW, and Airbus have stated that Brexit has threatened investment levels in the operations of the UK businesses. In fact, the Bank of England has also slashed the growth forecast of the UK and has issued a warning that the lack of transparency surrounding Brexit is severely affecting the economy of the country. It has further mentioned that since the departure of the UK from the EU is not finalized, the confusion is further fuelled. Also, a few business associations have criticized the political teams for focusing on infighting instead of preparing for Brexit, if there is a situation of no-deal.
After releasing the latest payment figures of the balance, ONS stated that the difference between the money entering and exiting the economy has widened in the third quarter and is now at £26.5 billion, which is nowhere near the predicted difference.
According to Dharshini Davis, one of the economics correspondents, investment by the firms may fluctuate depending on diversified factors but the decline in the spending for a prolonged period is an indicator to the financial crisis.
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