UK business confidence stages partial recovery in August

Business confidence in the UK staged a partial recovery after taking a hit after the referendum vote, according to the Yougov/centre for economics and business research (CEBR).

Yougov/CEBR’s sentiment gauge recovered to 109.7 points in August, following a drop from 112.6 to 105.0 after the referendum, thus recovering over half the losses.

The rise in confidence has been attributed to an improvement in business expectations in terms of capital investment, revenue from domestic sale and revenue from exports for the next year.

With the post-Brexit panic dying down and many indicators signaling a stable short-term outlook, businesses are feeling more confident about their own prospects, the pollster said.

The results of the 500 interviews carried out with organizational decision-makers revealed that 48% were optimistic about their outlook in August, up from July´s reading of 46% albeit still below the 53% seen prior to the referendum.

Furthermore, around half of businesses (45%) remain pessimistic about the prospects for the UK economy over the coming year, which could lead to a fall in investment and hiring on the part of business owners.

“In the short term at least, a more positive outlook from businesses and consumers will help grease the wheels of the economy – spurring spending and investment. What happens in the longer term is the big mystery. Once the UK shows its hand on Brexit and invokes Article 50 things could change for the worse quickly. But as businesses and consumers don’t know when this will happen, they have seemingly decided to just get on with it,” said Yougov/CEBR.