According to the latest Lloyds Bank business barometer, nearly one third of the companies in the United Kingdom complaining that their business is already being negatively impacted by Brexit.
There was a fall in the business confidence for the current month by six points to 23 per cent which was because of reduction in trading prospects for the rest of the year and economic optimism, the bank said.
Hann-Ju Ho, senior economist for Lloyds Bank commercial banking, said: “Business confidence was resilient in the first half of the year, but has eased back recently. This reflects changes in perceptions of Brexit risks, which underscores the importance of current EU-UK negotiations.”
Confidence on positive impact on business expectations because of Brexit fell to a net balance of -4 per cent for the current month compared to 3 per cent in July. This is the lowest number for the index since December last year.
The over all downward turn was primarily caused by this sentiment among businesses as 28 per cent of companies surveyed said that they had contemplated that they thought that leaving the EU is having a positive impact on their business activity. This is 3 points lower compared to the 31 per cent in July. There were 32 per cent of businesses that said that they were experiencing a negative impact on their business because of Brexit which is 4 per cent more the month before.
Lloyds said that wholesale, hospitality & leisure and public sectors were experiencing the highest concerns of Brexit.
London and the West Midlands, both at 37 per cent, and the North West, at 35 per cent, were the regions in the UK that exhibited the highest confidence, according to the findings. But there was an overall decline in confidence in eight out of 12 regions with the South East being the most prominent.
The most confident sector in the UK was the manufacturing sector with a score of 38 per cent but there was a sharp fall of 12 per cent at 36 points for the construction industry.
While the number of companies that are anticipating a pay rise declined, many companies are also postponing their plans for new recruitment, the Lloyds report also found.
“Economic uncertainty is definitely driving firms to think twice before investing in their businesses, although the manufacturing sector seems to be the most resilient, compared to the services sector which seems to be less confident”, said Sharon Geoghegan, managing director for SME banking at Lloyds.
(Adapted from Independent.co.uk)