No clear evidence of slowdown after EU referendum vote, BoE says

There was no clear evidence of a sharp general slowing in economic activity following the EU referendum, the Bank of England´s updated Agents´ Summary of Business Conditions survey for July found.

In the month immediately before the referendum vote the annual rate of activity growth was moderate and little changed, the report said, although it noted there had been signs of uncertainty leading to delays in decision-taking, including on capital spending, hiring and property investment.

After the vote, business uncertainty rose markedly with many firms having only just begun to craft new business strategies to adapt to the outcome.

Nonetheless, for the time being they were seeking to maintain ‘business as usual’.

The majority of firms did not anticipate a near-term impact on their hiring or investment decisions.

A third of the companies canvassed did however anticipate "some negative impact on those plans over the next twelve months," the report said.

"As yet, there was no clear evidence of a sharp general slowing in activity."

Wednesday´s report generally covered business conditions in the month preceding the EU referendum, but also provided a summary of intelligence gathered following the vote to leave the EU.

Dr. Howard Archer, chief UK + European economist at IHS Global Insight said: "While there may be some relief that the economy may have dodged an immediate sharp slowdown from the Brexit vote, the danger is still very much there given the major uncertainty that is apparent - and there seems a compelling case for the Bank of England to deliver a substantial package of measures at its August meeting to try and bolster business and consumer confidence.

"We expect the Bank of England to cut interest rates from 0.50% to 0.25% at the 4 August MPC meeting. We also suspect that Bank of England action will revive Quantitative Easing in August and it could also very well extending its Funding for Lending Scheme."