UK business confidence at lowest level in ten years - ICAEW

Business confidence has fallen to its lowest level in nearly a decade and is now below its post-referendum and post-election lows, the new Business Confidence Monitor from The Institute of Chartered Accountants in England and Wales revealed on Monday.

The BCM for this quarter saw a sharp fall from -0.2% to -12.3% in the wake of the Salzburg meeting of European Union leaders where the Prime Minister’s Chequers plan got shot down and due to the lack of progress on Brexit negotiations in general.

Confidence is in negative across the UK, with the South West, Scotland, Northern England and the West Midlands seeing the weakest readings with figures as low as -16.7% in some places. London on the other hand was at the least pessimistic end of the range.

Despite the low levels of confidence, growth in sales volumes was still around 4% and ws expected to remain at that rate for a full year.

Both quoted and non-quoted companies were wary of the Brexit negotiations, although the BCM found that the most pessimistic businesses were those quoted on the FTSE 350.

Around 42% of businesses were less confident in the economic prospects facing their organisation over the next 12 months, compared to the previous months (vs 31% Q3 2018)

Sharron Gunn, ICAEW executive director, said: “Business confidence is at its lowest point since the financial crisis ten years ago. Leaving the EU and its potential impact is at the front of everyone’s minds. This is a difficult time to run a business, let alone finance the major investments the UK economy will desperately need post Brexit to drive growth. The Budget offered some relief to business but more significant action is needed by Government to provide stability and reassurance.”