CBI surveys point to improving growth momentum as sentiment rises

The CBI’s business surveys showed private sector activity stabilised in the three months to May, after a long period of decline; and activity is set to improve over the next three months driven by modest growth in all three sub-sectors of the economy. On the supply side, disruption has retreated from post-COVID highs and concerns around shortages of equipment and inputs have largely normalised. Altogether, this has led to an improvement in business sentiment since the beginning of the year.

However, despite some signs of easing, the tightness in the labour market is still a source of concern for firms across the economy. On the whole, firms seem set to raise headcount over the next three months, even as it’s been reported to us that some skills remain hard to find. Pay pressures have cooled since the end of 2023, and look set to continue falling, but remain elevated compared to pre-pandemic lev