Businesses may cut investment and job hires post-Brexit, says IoD

Britain’s decision to leave the European Union will be “negative” for many companies in the UK as they are likely to impose a hiring freeze and reconsider investment plans, according to a survey of business leaders.

In a survey by the Institute of Directors (IoD) almost two thirds of its members said Brexit was negative for their business.

A quarter said they would put a freeze on recruitment, but a third said hiring will continue at the same pace and 5% expect to reduce staff.

The survey also revealed that 22% are considering moving some of their operations outside the UK. Over a third said they might cut investment in their company, 9% will increase investment and 44% will not change their investment plans.

Nearly three-quarters of business leaders said their top priority was for steps to be taken to protect the economy from a negative reaction to financial markets. Just over half said they were willing to be patient and get a good deal from the EU rather than negotiate a speedy exit.

The IoD surveyed over 1,000 business leaders in the immediate aftermath of the EU referendum vote between 24-26 June.

IoD director general Simon Walker said: “There is no point crying over spilt milk. We will not lose our faith in the ability of British firms to overcome these obstacles, but these results highlight the importance of the Bank of England maintaining stability in the financial system. It is crucial that the banks do not starve businesses of cash.

“Businesses have a clear message to those who may wish to replace David Cameron as Prime Minister: during the referendum campaign we were promised an open and outward-looking country after Brexit, now it must be delivered.”

Walker said on BBC Radio 4’s Today programme on Monday that people who voted Leave did not realise they were voting "for constitutional and economic chaos”.

“Business leaders are very, very concerned. Nearly half of them expect the other member states to punish Britain.”

Still, he maintained that nearly half of IoD members surveyed expected they could manage.