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UK businesses expect strongest output growth since Sept 2018: Survey

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LONDON British businesses predict the strongest rebound in output in more than a year over the next three months, after a weak end to last year, adding to expectations of a post-election pick-up in the economy, a survey showed yesterday.

The Confederation of British Industry (CBI) said its monthly output expectations gauge - based on responses to its surveys of manufacturers, retailers and the service sector - rose to +12 last month from +1 in December, its highest since September 2018.

But the measure estimating output over the past three months remained very weak at -16, up only a bit from December's reading of -20, the weakest since the 2008-09 financial crisis.

"It's great to see business confidence improve, but it remains to be seen whether this will feed through to activity," Ms Rain Newton-Smith, the CBI's chief economist, said.

Last month, the CBI predicted the economy would grow by 1.2 per cent this year, slowing from 1.3 per cent last year.

Britain formally left the European Union on Friday, starting an 11-month transition period during which Prime Minister Boris Johnson wants to negotiate a trade deal.

While Mr Johnson aims to avoid tariffs on goods, businesses that are part of complex cross-European supply chains fear new border checks will make them uncompetitive.

"The government must work quickly to establish a future relationship with the EU that can deliver prosperity across the whole economy, as well as refocusing its attention on important domestic priorities," Ms Newton-Smith said. - REUTERS