Business confidence defies Brexit gloom
Another blow for Project Fear as optimism hits fresh high
BUSINESS optimism has soared to a new high since the Brexit referendum, in a fresh blow to backers of the Project Fear campaign.
A survey by lloyds bank reveals that overall corporate confidence jumped 13 points in october.
Meanwhile, one of Britain’s top investors has said markets will not face a delayed slump as some have predicted.
And a separate report shows a fall in the number of firms warning their profits would be lower than hoped.
The lloyds study suggests that rising economic optimism and growing confidence in firms’ business prospects fuelled this month’s sunnier mood.
Companies are now at their most optimistic since April, it reveals.
Hann-Ju Ho, senior economist at the lender, said: ‘our october survey shows a rise in overall confidence and suggests that the economy is on track to grow at a moderate pace in the fourth quarter.’
Another study by the bank revealed that housebuilders – which would be among the worst-hit companies in a downturn – remained optimistic.
only around a third said uncertainty over Brexit was their biggest challenge.
But 42pc said their growth forecasts had actually improved since the referendum, against just 27pc which said there had been a decline.
It follows official statistics which last week showed the economy grew by 0.5pc in the three months to September 30 – casting doubt on the credibility of Treasury forecasts which had suggested it would shrink by between 0.1pc and 1pc.
And Peter Hargreaves, the billionaire co- founder of investment giant Hargreaves lansdown, insisted share prices would remain buoyant.
The blue-chip FTSE 100 is up 10.4pc since the result, partly driven by the fall in the pound as many of its firms earn cash in foreign currencies that is now more valuable.
Some anti-Brexit campaigners have claimed that stocks will run out of steam and come crashing down as the implications of the vote sink in.
But Hargreaves, who donated £3.2m to the leave campaign, said: ‘I don’t see the stock market at the top at all.’
He said he was ‘extremely excited about Brexit’ and argued it would be ‘good for the stock market’.
A key test of investor appetite is likely to come on Thursday with the flotation of price comparison site GoCompare, which is being split off from its parent, Esure. It has an estimated £400m price tag and trading is likely to be keenly watched for evidence of market confidence.
Hargreaves’s words were backed up by a report from accountancy giant Ernst and young which showed that the number of listed UK firms posting profit warnings dropped in the three months to September 30.
There were 68 warnings in the quarter, 11 fewer than the same period last year.