New research suggests that rising prices are affecting companies, as firms are “spreading water”.
The CBI said the sector’s activity remained “sluggish” in the three months since July, with no improvement expected in the coming quarter.
The CBI said that the activity in business and professional services grew at a faster pace as compared to the previous month, while the activity in consumer services continued to decline.
As per the survey of 538 firms, firms do not expect to see any growth in private sector activities in the coming quarter.
CBI chief economist Alpesh Paleja said: “As firms and consumers are troubled by rising prices, private sector activity has almost come to a standstill.
“With the announcement of further hikes in the energy price cap now just weeks away, consumer-facing firms will also be poised to exert even harder pressure on household income in the coming months.
“Consumer spending is not going to restart the engine on growth this time.
“Promoting business investment will help fill the void left by families, but incentives need to be bold, or they will not scratch the surface.
“As the political drama heats up, it has been encouraging to see both the prime ministerial candidates as well as the main opposition party putting the economy at the front and center of the political debate.”