Investment in business plummets

Business investment saw the steepest decline on record in the final quarter of 2009, official figures confirm.

By The Newsroom

Published 26th Mar 2010, 21:55 BST

Updated 26th Mar 2010, 21:55 BST

In the wake of the Budget's 2.5bn pledge to help small UK businesses, the Office for National Statistics said yesterday business investment fell 4.3 per cent between October and December and 23.5 per cent year-on-year – the largest annual drop since records began in 1967.

Yesterday's figure, which revealed investment of 27.3bn in the quarter, improves on an earlier estimate for a 5.8 per cent fall quarter-on-quarter.

But experts said the still-low levels of investment failed to lift hopes for a marked recovery for the battered business sector.

Yesterday's figures showed that private and public sector manufacturers pulled back the most on investment spending, down 32.3 per cent year-on-year in the quarter, to 2.4bn.

Services and construction also cut back heavily.