UK business confidence plunges as Brexit ‘roulette wheel continues to spin’
04 Feb 2019
The latest Business Confidence Monitor (BCM)*, published by the Institute of Chartered Accountants in England & Wales (ICAEW), shows that business confidence has plummeted, amidst worries about Brexit, general economic turbulence and weaknesses in the UK.
According to the report, the key findings this quarter include:
• Business confidence has further weakened to -16.4, from -12.3 in the last quarter
• Sales and turnover continue to grow, but the pace is gradually slowing
• This slowdown in sales is translating into a sharper easing in profits growth
• Weaker sales and profits growth, together with very low levels of business confidence, are having an adverse impact on investment intentions
• Several business challenges, notably access to skills, staff turnover, late payments and transport problems, are on the rise
• Confidence across all sectors is in negative territory, apart from IT & Communications, with the Retail & Wholesale sector the least confident
The concerning outlook is spread across the UK, with negative confidence levels in every region. The lowest were London, the West Midlands and East of England.
Commenting on the BCM, Michael Izza, ICAEW Chief Executive, says: “Companies at the moment are unclear about the future. Directors have the exceptionally difficult task of explaining within their annual reports the impact Brexit might have on their business models and operations. As the roulette wheel continues to spin, UK plc is having to place its bets based on best guesswork - and the stakes could not be higher. Companies are making decisions now about jobs, supply chains, headquarters and asset locations - incurring significant, and possibly unnecessary, cost and upheaval.
“We fear the destructive effects of a ‘no deal’ outcome on the economy so urge our politicians to work together to break the Brexit deadlock and help restore business confidence. Otherwise we can expect slow growth in 2019, with businesses unable to rely on consumers or exports to help expansion - hitting jobs and impacting on public services.”
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*Download the latest report - Q1 2019 ICAEW Business Confidence Monitor