Outlook for UK business darkens fast ahead of Brexit, BCC warns

FILE PHOTO: The financial district can be seen as a person runs in the sunshine on London's south bank
FILE PHOTO: The financial district can be seen as a person runs in the sunshine on London’s south bank, Britain February 23, 2019. REUTERS/Henry Nicholls

April 1, 2019

By Rachel Cordery

LONDON (Reuters) – Fading exports and worsening finances spurred a darker outlook for British companies last month, hurt by a slowing global economy and political chaos around Brexit, a survey showed on Tuesday.

The British Chambers of Commerce’s (BCC) Quarterly Economic Survey showed a familiar picture of weak investment ahead of Britain’s departure from the European Union, across both the manufacturing and services sectors.

Britain had been due to leave the EU on March 29 but Prime Minister Theresa May was forced to ask the EU for a delay after the country’s parliament refused to back the exit plans she had negotiated with Brussels.

Currently Brexit is due to take place at 2200 GMT on April 12, unless May comes up with another option.

The BCC said growth in services exports, which account for about 45 percent of total exports, slowed to their weakest rate since 2009.

Its gauge of firms’ cashflow turned negative for the first time since 2012 and investment intentions for both manufacturers and services firms were the weakest in over eight years.

Overall, the BCC report adds to a string of downbeat data from businesses ahead of Brexit, despite solid consumer spending and a robust labor market.

“Our findings should serve as a clear warning that the ongoing impasse at Westminster is contributing to a sharp slowdown in the real economy across the UK. Business is hitting the brakes hard,” BCC director general Adam Marshall said.

Last week Marshall told politicians addressing the BCC’s annual conference in London that they needed to stop “chasing rainbows” and instead find a consensus over Brexit.

The BCC survey, the largest of its kind, covered more than 7,000 companies between Feb. 18 and March 11.

Another closely-watched gauge of the economy, the IHS Markit/CIPS survey of the services sector for March, is due on Wednesday.

(Editing by Andy Bruce and David Milliken)

Source link