Major UK firms may invest less
london — The chances of Britain’s economy picking up steam diminished further on Monday as surveys showed major companies have curtailed their investment plans and that consumers spent less on their credit cards.
The reports added to a string of lacklustre economic data that has raised questions about the chances of the Bank of England raising interest rates this year.
Accountancy firm Deloitte said business optimism at large British companies fell sharply in the second quarter, dampened by the inconclusive outcome of last month’s national election.
Deloitte’s survey of chief financial officers showed 72 per cent thought the overall business environment would be worse once Britain leaves the European Union, the largest proportion since Deloitte started asking the question a year ago.
Only 8 per cent of respondents saw an improvement after Brexit.
“This underscores the importance of the Brexit negotiations producing a favourable environment for UK businesses, with access to the skills and markets they need for their future success,” said David Sproul, chief executive of Deloitte North West Europe.
The survey’s findings have proven a good predictor for the BoE’s own investment intentions survey which BoE officials watch closely as part of their monitoring of Britain’s economy.
Businesses are pressing May and her government to negotiate a smooth Brexit in two years’ time, saying an abrupt departure would deter investment.
Deloitte said investment intentions among CFOs deteriorated, probably disappointing some BoE policymakers who have been pushing for the first interest rate hike in a decade. — Reuters