Outlook for UK business looks bleak as Brexit looms, BCC warns
Diminishing exports and weaker finances paints a bleak future for British businesses, with UK-based companies being hit hard by an ailing global economy the uncertainty surrounding Brexit, according to a recent survey.
The British Chambers of Commerce’s (BCC) Quarterly Economic Survey painted a bleak outlook for British businesses in both the manufacturing and services sectors, driven by weak investment ahead of the UK’s planned departure from the EU.
In fact, the latest survey by the BCC suggests that UK growth has nearly ‘ground to a halt’ in the first quarter of 2019, with companies growing increasingly anxious over Brexit and weakening global economic conditions.
Brexit uncertainty takes its toll on British business
The UK was due to leave the EU on March 29, but the British Prime Minister Theresa May opted to delay Article 50 after MPs in the House of Commons rejected her deal for the third time last week.
The ongoing uncertainty surrounding Brexit has taken its toll on British industry, particularly on members of the UK manufacturing and services sectors.
‘The services sector suffered the more substantial loss of momentum in the first quarter with both domestic and international activity slowing sharply in the quarter,’ Suren Thiru, Head of Economics at the BCC, said. ‘The manufacturing sector continues to struggle amid tougher global and domestic trading conditions and rising cost pressures.’
‘The marked decline in the export indicators in both sectors suggests that net trade is likely to have been a drag on UK GDP growth in Q1,’ he added. ‘The deterioration in cash flow is concerning as it can leave firms more vulnerable to external shocks, including disruptions to supply chains.’
British services exports slow to their weakest rate in ten years
The BCC survey showed that growth in services exports, which make up around 45% of total UK exports, had slowed to their weakest rate since 2009.
Overall, the BCC report offered a rather bleak picture for UK businesses ahead of Brexit, despite consumer confidence and spending remaining relatively stable.
‘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.
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