Business confidence has crashed to its lowest level since September 2012, amid continued Brexit uncertainty, a new report has shown.
Accountancy firm BDO’s Optimism Index, which shows how businesses expect output to develop in the next three to six months, fell to 96.10 in March from 99.79 in February. This was the worst monthly drop in the index since November 2008, during the recession. Sentiment is now weaker than its previous low point after the UK’s vote to leave the European Union in 2016.
Peter Hemington, partner at BDO, said: “Continued uncertainty about Brexit has led to a severe worsening of expectations about our near economic future. What we’re now seeing is a sudden realisation that a no-deal Brexit is both a real and imminent possibility.
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“With optimism at levels last seen when we just avoided double-dip recession in 2012, UK businesses expect a zero-growth economy as the backdrop to their plans. This matters, because worried businesses don’t hire or invest, creating the conditions for a marked downturn.
“Looking on the bright side, most businesses are not unhappy with current trading. If the fear of no deal can be lifted, we should hope for a quick return of confidence, and perhaps even a “no-deal averted” bounce in the economy. Let’s hope our politicians can deliver this.”