Business confidence falls "off a cliff" in wake of EU vote

 
Jake Cordell
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Firms will be hoping the UK economy has its own safety rope as they batten down the hatches for a bumpy Brexit ride
Firms will be hoping the UK economy has its own safety rope as they batten down the hatches for a bumpy Brexit ride (Source: Getty)

Business confidence has been rocked in the aftermath of the EU referendum, with the number of firms feeling down about the economy doubling in the week after the vote.

Almost half of all firms - 49 per cent - told YouGov and the Centre for Economics and Business Research (CEBR) they were pessimistic about short-term outlook for the UK, compared to just 25 per cent on the eve of the referendum.

Scott Corfe of the CEBR said: "Not only are businesses feeling much more pessimistic in general about the state of the economy, but their own expectations fro domestic sales, exports and investments over the next 12 months have gone off a cliff."

On an index where scores less than 100 signify contraction, optimism in the wider economy plunged from 105 to 87 between 21 June and 28 June. Nevertheless, confidence among businesses in their own fortunes stayed above 100, dropping 10 points to 109.

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Corfe added: "These figures show what is happening on the ground and they suggest a significant shock reaction. Hopefully this is a short term panic reaction and confidence will edge up again once the dust settles."

Separate figures out this morning showed output in the construction industry was shattered in the days before the vote, with the purchasing managers' index falling to a seven-year low and analysts raising fears it could go even lower now the UK has voted to untangle itself from the EU.

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