Economic growth picked up in the final quarter of 2015 despite continuing problems for manufacturers, a new study has shown.
A survey of more than 750 private companies by the CBI revealed a strong end of year for business and professional services and an improving picture for retail and wholesale sectors.
But manufacturers, especially exporters, continue to face difficult times, said the business group.
The balance of firms reporting rising output in the past three months was 20%, well up on the long run average of 5%, with a similar pace of growth expected in the next quarter, said the CBI.
Director general Carolyn Fairbairn said: “The UK economy has finished the year strongly, with business services acting as a lightning rod for growth.
“Nonetheless, there is no room for complacency in 2016 as significant challenges to global growth remain.
“Many emerging markets are facing a testing time, with China moving to a slower growth path and other emerging economies being buffeted by low commodity prices, capital outflows and currency depreciation.
“The picture differs markedly by sector. Manufacturers are having a tough time, with the strength of sterling hitting their competitiveness in the eurozone and the slowdown in emerging markets weighing on export demand.
“And the North Sea industry and its suppliers are feeling the impact of falling global oil prices.”
“Ultimately, employers want relief from the cumulative burden that could harm the UK’s competitiveness, as the combined effect of the introduction of the apprenticeship levy and the national living wage begins to bite against the backdrop of unreformed business rates and the administrative challenge of pensions enrolment.”