At the time of the February Inflation Report, business investment had been declining for three consecutive quarters to 2018 Q3. The level of business investment was almost 2% lower than a year earlier, despite the economy and employment continuing to grow over the same period. Since then, this pattern of weak investment has continued into Q4.
Weak investment appears to primarily reflect Brexit and associated uncertainties. The recovery of business investment from the 2008 recession was broadly in line with previous episodes until the EU Referendum Act was passed in 2015. Since then the recovery in business investment has stalled (Chart A).