Bank of England research polling the UK’s top business people says Brexit is disastrous for business and confidence.
Brexit-related uncertainty is increasing amidst industry leaders according to the survey, which helps monitor developments in the UK economy. The Bank of England’s Q2 survey of its Decision Maker Panel (DMP) – comprised of approximately 8,000 eminent representatives from UK businesses – revealed that Brexit is in the top three current sources of uncertainty for well over half of its members (57%). This is the highest quarterly value recorded since the survey’s inception in 2016.
The DMP expected Brexit-related uncertainty to be persistent and increasingly thought it would take longer to resolve. When questioned in February 2019 around 45% of panel members affected by Brexit-related uncertainty reported that they expected this [uncertainty] to be resolved by the end of 2019. By April this had fallen to around 35%, no doubt influenced by the UK’s withdrawal from the EU being delayed.
Many factors were cited as the source of Brexit uncertainty and these varied according to the sectors the businesses operated within. However, worries about supply chains and customs were the most commonly mentioned. Uncertainty about future demand for the respondents’ goods and services also weighed heavy.
The panel, which is highly valued by policymakers at the Bank of England, also reported that sales growth had fallen back from the previous quarter and expected it to slow down further over the year ahead.
“Uncertainty is universally detrimental to industry and the financial markets whilst a definitive course of action, even if it isn’t unanimously popular, can have a positive effect for the economy as a whole,” said Clem Chambers, Bank of England Decision Maker Panel member and CEO of stocks and shares website ADVFN. He continued: “Currently we don’t know if Brexit is on or off or even what flavours of Brexit are actually on the cards and you can’t get more uncertain than that. A hard Brexit will crush the pound; expect a run at parity 1:1 to the euro and perhaps even 1:1 with the dollar if we bail out of the EU in October.”
The results from the Decision Maker Panel survey – 2019 Q2 can be found here.