Business investment boomed in the third quarter, with companies’ capital spending growing at the fastest quarterly pace for two years.
Business investment across corporate Britain rose by 3.1 per cent in the quarter, lifting its year-on-year growth rate to a buoyant 6.9 per cent, up from 4.8 per cent in the previous three months.
The latest surge of investment activity came on the heels of strong gains in the previous two quarters, so that this year has so far seen the strongest run of quarterly capital spending by companies since 2000. Manufacturing investment rose 1.6 per cent in the third quarter, with investment in the distribution sector up by 1 per cent, and in the remainder of the services sector by a robust 2.7 per cent.
Michael Saunders, of Citigroup, predicted that present high rates of return would sustain the investment revival.