Pessimism among UK businesses almost doubles after EU vote: survey

[LONDON] Confidence among British businesses fell sharply following the vote to leave the European Union, a survey showed on Tuesday, reinforcing the view that the economy could be in for hard times after the historic decision.

The number of businesses pessimistic about the economy over the next twelve months jumped to 49 per cent in the week following the referendum from 25 per cent before the vote outcome, according to a survey conducted by YouGov and the Centre for Economics and Business Research (Cebr).

Britain's vote to withdraw from the 28-nation club has prompted political chaos, a sharp drop in sterling and clouded the economic outlook.

Against this backdrop, Bank of England Governor Mark Carney has said it would likely need to provide more stimulus to the economy over the summer. "These figures .... suggest a significant shock reaction (to Brexit)," Scott Corfe, director at Cebr said. "Not only are businesses feeling much more pessimistic in general about the state of the economy, but their own expectations for domestic sales, exports and investments over the next 12 months have gone off a cliff."

The survey of 1,000 British-based companies also showed 26 per cent of respondents were pessimistic about their own business outlook, up from 16 per cent before the referendum.

Businesses are increasingly downbeat about their operations in the year ahead, with expectations for domestic sales, exports and capital investment all dropping sharply, it showed.

REUTERS