LONDON, Dec 23 (Reuters) - British businesses have reported their weakest growth since the country was under lockdown earlier this year and they expect a further slowdown in early 2022, the Confederation of British Industry (CBI) said on Thursday.
The CBI's monthly growth indicator - which combines surveys of output from manufacturers, retailers and other services companies - fell 11 points to +21 in the three months to December, the lowest since the three months to April.
Growth was expected to slow again in the coming three months as the Omicron variant of the coronavirus weighs on the economy.
"Substantial challenges remain for businesses heading into Christmas: labour and materials shortages, rising costs and new COVID measures are restricting businesses' ability to trade during this crucial period," CBI Lead Economist Alpesh Paleja said in a statement.
Prime Minister Boris Johnson has ruled out new COVID restrictions in England before Christmas but said he might have to act afterwards. Scotland and Wales have tightened controls.
Alpesh said finance minister Rishi Sunak's announcement on Tuesday of 1 billion pounds ($1.33 billion) in support for hospitality and leisure firms would provide a breathing space.
"But with the potential of further measures still weighing on firms, the government must monitor the situation closely and ensure that any new restrictions go in lock-step with further targeted cashflow support," he said.
Despite the slowdown, the CBI's growth gauge remained a long way above its long-run average of +4.
Only manufacturers saw an acceleration in growth in the three months to December. Business and professional services, consumer services and distribution firms all reported slower growth, the CBI said.
($1 = 0.7510 pounds)
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