Business investment fell sharply in the final quarter of last year as credit restrictions and slumping demand prompted companies to slash their expansion plans, data released yesterday show.

Business investment by manufacturing and non-manufacturing companies in the three months to December was estimated to have fallen by 3.9% on the previous quarter and was 7.7% down on the same period in 2007, according to the Office for National Statistics. For manufacturing, the drop was 11% from the third quarter.

Financial Times