Business investment in the second quarter plunged by the fastest annual rate since records began 42 years ago, official figures show.
The Office for National Statistics (ONS) estimated that investment by UK businesses – covering expenditure from IT to building works – plummeted 18.4 per cent year-on-year to £29.89 billion in April to June.
The figure was also 10.4 per cent lower than the previous quarter at the height of the UK recession, which was a 24-year record quarterly drop.
ONS data showed that on a quarter-on-quarter basis, the manufacturing industry reined in capital spending the most, down 16.8 per cent, while other private sector businesses saw a 9.7 per cent drop and public corporations slashed investment by 7.2 per cent.
Engineering firms and vehicle manufacturers were among those to cut spend heavily.
Today’s worse-than-expected business investment figures raised fears ahead of tomorrow’s second estimate of GDP for the second quarter.
Alan Monks, economist at JP Morgan Chase, said it was unclear whether it would have been enough to lead to a downward revision of second-quarter figures, which initially estimated the economy to shrink by 0.8 per cent between April and June.