UK industry sees business situation at the most pessimistic since the Covid pandemic

UK business sentiment has deteriorated sharply, with the CBI survey showing output volume expectations plunging to -20 (from -3) as firms frontload orders to build safety stocks. Output price expectations jumped to +32 in April from +12 in March — the largest one-month rise since records began in 1975 — while planned spending on buildings, plant & machinery and training is at its weakest since April 2020. Unit costs are also expected to rise at the fastest pace in over three years. The data point to rising price pressures that will increasingly weigh on demand and pose a headache for the Bank of England, heightening stagflation concerns and presenting downside risks for the pound and UK economic activity.