Sector Focus Brexit ‘puts a dent in confidence’
New research from business and financial adviser Grant Thornton suggests that Brexit has dented UK business confidence. According to the survey, nearly half (49 per cent) of respondents were
less confident over the year ahead, whereas only eight per cent felt more confident. A fifth (21 per cent) are actively planning to decrease investment in the year ahead, with 56 per cent remaining unchanged in their investment decisions. Respondents pointed to the impact of a general decline in the UK
economy as a concern (74 per cent), along with the impact of exchange rate movements (57 per cent) and declining consumer confidence (55 per cent) as areas which may affect their business.
‘Businesses are uncertain about how the economy will perform over the next 12 to 24 months’
David Hillan, practice leader at Grant Thornton in Birmingham, said: “Whilst much of the immediate political and economic turbulence following the outcome of the vote has settled over the past few weeks, the general outlook for the UK economy remains a top concern for most businesses. “Many of the businesses we speak with are taking a business-as-usual
approach to their day-to-day operations, but looking further into the horizon, some are reconsidering their investment intentions based on the post-vote indicators and general mood music in the markets. “The Bank of England’s interest rate cut earlier this month will have
been met with mixed reactions. Many businesses will be encouraged by lower borrowing rates and the stimulus package announced; whereas others will see the reciprocating impact of the fall in sterling hit their cost of imports and be discomforted by the BoE’s outlook on the UK economy.
David Hillan: Brexit has hit confidence
“There have been immediate winners and losers as a result of changes
in foreign exchange rates, and businesses and our clients in and around Birmingham and the West Midlands are adjusting to that. “What is equally clear is that businesses are uncertain about how the
economy will perform over the next 12 to 24 months – part of that is Brexit and part of it is global economic performance, and it is difficult to distinguish between the two. “Despite the lack of consensus on the timing for Article 50 to be
triggered, the general sentiment we're getting from clients and the market is that they want the government to have a clear vision before beginning the negotiations. Businesses are encouraging the government not to rush the process, but acknowledge that delaying it increases uncertainty, which is equally bad for business. “It’s critical that the government use this opportunity to collaborate
across the public, private and third sectors to make this happen so we can look back and feel proud of how all contributed to our nation's future at this critical stage.”
October 2016 CHAMBERLINK 55
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