LONDON, June 1 Reuters British companies expect barely any growth over the next three months, in their gloomiest outlook since February last year, as the costofliving squeeze reduces households39; disposable income, the Confederation of British Industry said on Wednesday.

The CBI said the expectations element of its surveys of manufacturers, retailers and other services industries fell to 1, indicating a 1 percentage point difference between the proportion of firms expecting growth rather than contraction.

It39;s worrying that expectations for privatesector activity have worsened, but unsurprising given that headwinds continue to intensify, CBI economist Alpesh Paleja said.

A majority of consumer services companies expect sales to fall over the next three months as households rein in unnecessary spending, while manufacturers see growth and retailers and business services firms think output will be flat.

Some economists have warned British economic output might contract over the three months to June, due to headwinds from an extra public holiday to mark Queen Elizabeth39;s Diamond Jubilee as well as reduced COVID testing and broader headwinds.

Last month the BoE warned the economy would come close to recession by the end of the year, when inflation is set to reach double digits.

Britain39;s government last week announced a further 15 billion pounds of costofliving support to households, on top of 22 billion pounds announced earlier in the year.

The CBI said…