Optimism in UK factories sours as Brexit, global economy take toll: CBI

FILE PHOTO - A worker constructs a Bentley Continental GT on the prodution line at the luxury automaker's manufacturing facility in Crewe
FILE PHOTO – A worker constructs a Bentley Continental GT on the prodution line at the luxury automaker’s manufacturing facility in Crewe, Britain October 15, 2018. REUTERS/Darren Staples/File Photo

January 23, 2019

LONDON, (Reuters) – Optimism in British factories faded badly over the last three months, especially around the outlook for exports in a slowing global economy and ahead of Brexit, an industry survey showed on Wednesday.

The Confederation of British Industry’s (CBI) quarterly gauge of manufacturing expectations fell to -23 in the three months to January from -16 in the period to October, its lowest level since July 2016.

The survey adds to signs of fading business confidence ahead of Britain’s scheduled departure from the European Union on March 29.

There is still no agreement in London on how and even whether it should leave the world’s biggest trading bloc, and there is a growing chance of a “no-deal” exit with no provisions to soften the economic shock.

British manufacturers’ optimism around exports for the year ahead fell to the lowest level since January 2009, during the depths of the last recession, the CBI said.

“The manufacturing sector is clearly feeling the pinch of Brexit uncertainty, with worsening business sentiment coinciding with an ongoing reluctance to invest in new facilities, machinery, innovation and training,” CBI head of economic intelligence Anna Leach said.

The CBI’s monthly gauge of industrial orders fell to -1 in January from +8 in December. A Reuters poll of economists had pointed to a reading of +5.

(Reporting by Andy Bruce, editing by Costas Pitas)

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