UK business pessimism almost doubles after Brexit: Survey

July 5, 2016 10:00 am

People holding banners during a
demonstration against Britain’s decision to leave the , in
London, on July 2, 2016. (Reuters photo)

Pessimism about the economic
outlook in the has sharply increased following the historic vote to
leave the European Union, a new survey shows.

The number
of businesses pessimistic about the economy over the next year jumped to
49 percent in the week after the referendum, up from 25 percent prior
to the vote known as , according to a survey published Tuesday by
YouGov and the Centre for Economics and Business Research (Cebr).
“These
figures show what is happening on the ground and they suggest a
significant shock reaction,” Cebr Director Scott Corfe 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,”
he added.
Britain’s decision to break away from the 28-nation
bloc has plunged the country into political chaos, prompted a sharp drop
in sterling and created deep uncertainty about future trade terms with
the .
Many economists believe Brexit will trigger recession.
Bank of England Governor Mark Carney has already warned that the
economic outlook has “deteriorated.”
Carney said the bank would likely need to provide more stimulus to the economy in order to help it cushion the Brexit blow.
The
survey of 1,000 British-based companies also showed slightly more than a
quarter of business owners were pessimistic about their own business
outlook, up from 16 percent before the June 23 referendum.
A
member of the European Central Bank Governing Council warned over the
weekend that the UK would face inflation and recession following the
vote to withdraw from the EU.

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