Bank of England research polling the UK’s top businesspeople has highlighted the severe impact of Brexit ambiguity amongst British firms.
The latest survey by the Bank of England of its Decision Maker Panel (DMP) – comprised of over 8,000 eminent representatives from UK businesses – has revealed that almost half of those questioned reported a fall in investment over the last year (46%). The average probability they attached to reduced investment spending over the year to Q2 of 2020 was 45%.
The poll also highlighted an increase in the number of firms citing Brexit as their number one source of uncertainty (30%). This marks a 22% rise on the figure recorded in the February to April 2018 survey. A further 29% ranked Britain’s withdrawal from the EU as one of the top three sources of uncertainty facing their business. Only 9% of respondents believed it was of little consequence. Additionally, 43% of respondents believed the leave decision and the eventual Brexit agreement would have a negative impact on their sales.
The Decision Maker Panel (DMP) surveys help to monitor developments in the UK economy. One of the key purposes of the DMP is to track members’ expectations about Brexit.
“The Brexit goal posts keep moving. With extreme political moves like proroguing parliament, conflicting reports about the prospect of a UK recession and concerns that the labour market is cooling uncertainties are rife,” said Clem Chambers, Bank of England Decision Maker Panel member and CEO of stocks and shares website ADVFN. He continued: “Against this backdrop, there’s little wonder that UK companies are cutting their capital expenditure. If parliament kills Brexit this trend will reverse sharply, if it doesn’t, the outcome is indeterminate.”