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UK businesses expect strongest output growth since September 2018 - CBI

FILE PHOTO: An estate agent property advertisment is seen painted on a wall in London

LONDON (Reuters) - British businesses predict the strongest rebound in output in more than a year over the next three months, after a weak end to 2019, adding to expectations of a post-election pick-up in the economy, a survey showed on Sunday.

The Confederation of British Industry said its monthly output expectations gauge - based on responses to its surveys of manufacturers, retailers and the service sector - rose to +12 in January 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," Rain Newton-Smith, the CBI's chief economist, said.

Last month the CBI predicted the economy would grow by 1.2% this year, slowing from 1.3% in 2019.

Britain formally left the European Union at 2300 GMT on Friday, starting an 11-month transition period during which Prime Minister Boris Johnson wants to negotiate a trade deal.

While 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," Newton-Smith said.


(Reporting by David Milliken, editing by Andy Bruce)