UK biz expectations fall ‘off a cliff ’

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CONFIDENCE of British executives plunged and pessimism doubled as the Brexit turmoil stoked concerns that business investment and the property market are poised to slump.

AnindexpublishedbyYouGovandtheCentre for Economics and Business Research on Tuesday tumbled to 105 from 112.6 in the three days ended June 23, the referendum date. The survey, which was carried out between June 28 and July 1, also found the proportion of businesses that are pessimistic about the economic outlook climbed to 49% from 25%.

“These figures show what is happening on the groundandtheysuggestasignificantshockreaction,” said the institute’s director, Scott Corfe. “Not only are businesses feeling much more pessimisticingeneralaboutthestateof theeconomy, but their own expectations for domestic sales, exports and investments over the next 12 months have gone off a cliff.” The survey was released hours after Standard Life Investments suspendedtradinginits2.9billion-pound($3.9billion)UK Real Estate fund amid a flood of withdrawals, the strongest signal yet that the turmoil from the Brexitvotewillprobablyhitthepropertymarket. Underscoring executives’ concerns that policy makers will fail to act with both main political parties in chaos, five of the biggest UK business groups appealed for government action.

July 5: Uncertainty in the run-up to Britain’s vote on its EU membership slowed service sector growth last month to a three-year low and sent business expectations to their weakest since the end of 2012, a survey showed on Tuesday. The Markit/CIPS UK services PMI eased to 52.3 in June from 53.5 in May, matching April’s level which was the lowest since April 2013. That was below a median forecast in a Reuters poll of economists for a 52.7 figure. The vast majority of responses from services companies — 89% — were received before it became clear on June 24 that Britons had voted to leave the EU. Reuters

BrexitnervesalreadytooktheirtollonUKservices firms in June as customers postponed or cancelledorders,sendingbusinessconfidenceto a 3.5-year low, Markit Economics said.

“A further slowing, and possible contraction, looks highly likely in coming months as a result of the uncertainty created by the EU referendum,” Almost three quarters of economists surveyed by Bloomberg expect the UK to slide into recession and Bank of England Governor Mark Carneyhassaidthattheoutlookfortheeconomy has “deteriorated.” He reinforced that view on Tuesday, saying that evidence since the vote suggestthatthere’sa“prospectof amaterialslowing in the economy.” Bloomberg