Business optimism and output sink to three year lows on back of referendum
RISING uncertainty in the run up to the referendum has seen business output and optimism sink to three-year lows for the second month running according to the latest findings from BDO.
Business output, which reflects companies’ experience of orders for the three months ahead, sat at 99.0 in June.
Business optimism, which predicts growth six months ahead, fell to 98.9. UK Manufacturing continues to have the gloomiest outlook, with its optimism sub-index slumping to 83.8.
BDO proposes that government acts quickly to enact a three point plan to stabilise the economy and position the UK for growth. The plan includes: encouraging prosperity in the manufacturing region; solving the productivity puzzle; injecting more cash into the economy via quantitative easing.
Peter Hemington, Partner, BDO LLP, said: “The uncertainty prompted by Brexit has disrupted investment in the UK economy, but the signs of a slowdown were already showing ahead of the decision.
“In all likelihood, whatever arrangements the UK eventually arrives at with the EU won’t look very different from what we have at the moment. So businesses cannot afford to get caught up in the hysteria. They need to hold their nerve and continue to invest in the UK.
“We are at a crucial moment where we must be sensible in protecting the UK economy. We need a plan of action now that gives businesses the added confidence to progress with investment plans.”