CBI reports decline in UK services sector business confidence in May

The Confederation of British Industry (CBI) reports that business confidence in the country's service sector has dropped to its lowest level in 2.5 years. The business sentiment index fell to -43% in May, down from -28% in February. The last time it hit similar levels was in November 2022, according to Reuters.

In recent months, the financial burden on British companies has increased significantly. In addition to the £25 billion (approximately $33.64 billion) rise in employer contributions to the social security system, announced by Finance Minister Rachel Reeves, the minimum wage increased by almost 7% in April.

According to CBI expert Alpesh Paleja, the combined impact of rising costs and persistent price pressures in the UK is clouding the prospects for businesses.

Meanwhile, the Bank of England, which cut interest rates this month, continues to closely monitor inflation trends in the country as it determines its strategy for further monetary policy easing.