UK Business Sentiment ‘Collapsed’ After Brexit Vote, says Credit Suisse

Sentiment among big businesses with operations in the UK has plummeted to unprecedented lows in the wake of the UK-wide referendum on Britain’s membership of the EU.

According to a recent survey of company executives, optimism among business leaders has deteriorated significantly across Europe, with those from the UK having become a great deal more pessimistic about their prospects than was the case just one month ago.

The poll was carried out by Credit Suisse and only covered a total of 80 executives but would seem to reflect a generally downbeat mood among executives who are faced with considerable uncertainty after the British public voted to leave the European Union last month.

Sentiment about corporate prospects in the UK are described by the Swiss banking group as having “deteriorated out of all recognition” in recent weeks.

A two-thirds majority of European companies are now expecting to delay or reduce their spending in the UK over the course of the next six months, according to Credit Suisse’s research.

Expectations are also that the post-Brexit pessimism among businesses in the UK will have a considerable impact on hiring strategies throughout the country in the coming weeks and months.

Close to 50 per cent of all the executives quizzed recently by Credit Suisse said that they would be looking to postpone hiring decisions until after it became clearer how the UK’s trading relationship with the EU will eventually look.

Worryingly perhaps for the UK as whole, around 10 per cent indicated that they now plan to add to their workforces in other EU countries instead of in Britain as a result of the referendum vote.

A majority of respondents to the survey also said that the ongoing political turmoil and the prospect of a British exit from the EU means that they will be introducing spending cuts and will hold back investments at least in the short-term.

Most of the business men and women polled by Credit Suisse work for large-scale companies whose revenues run into billions of euros on an annual basis.

There are now expectations in some quarters that the UK’s unpredictable economic outlook will soon prompt the Bank of England to reduce its base rate of interest further from its current historic low of 0.5 per cent.