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In spite of consolidation through M&A and management buyout activity, the UK print industry is still suffering from over-supply and is increasingly uncompetitive in Europe, according to industry lender HSBC.

Simon France, who heads up the bank's printing division told printweek.com: "The print industry still faces a surplus of capacity in the UK, adding to the pressure on margins and increasing need for print businesses to differentiate themselves from each other."

The comments follow the bank's latest outlook for the British economy, which said that, although the UK had experienced 62 consecutive quarters of economic growth since the end of the last recession, "there is little doubt that the economy is now weakening".

France continued: "Increasing costs have also been an issue for UK printers. This includes those of paper, plates and electricity. In addition, the weakness of the pound against the euro has also resulted in increasing costs from European-based suppliers, including a number of the major press manufacturers.

"With the aforementioned pressures on the industry, it becomes even more important for printers to ensure the funding in its business is structured to ensure working capital and asset finance facilities are established with current and future needs in mind."

HSBC's overall economic outlook, which was authored by chief economist Dennis Turner, said: "Spending by consumers and the government, the primary drivers of activity, is under pressure for a variety of reasons and there is little sign of a surge in investment or exports to fill the gap."

HSBC's far from positive take on the economy is matched in tone by the findings of a survey into the UK's tax system, conducted by accountancy and consultancy firm PricewaterhouseCoopers. Last week the firm surveyed 104 executives from British business, only a quarter of whom said they expected business growth to continue. Another quarter said they expected business activity to stagnate. The majority (66%) of senior executives reckoned that the UK tax system is less competitive than it was five years ago.