Standard & Poor's says UK economy's rebound in August may be a "mirage"

Caitlin Morrison
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Was it just a mirage? S&P says the UK's economic rebound in August could have been... (Source: Getty)

Ratings agency Standard & Poor's (S&P) has warned that signs of a post-Brexit vote recovery in Britain's economy may prove to be a "mirage" as uncertainty about the country's relationship with the European Union weighs on business investment.

"While the news is encouraging, we believe it has no bearing on the cloudy longer-term outlook for the UK economy," Sophie Tahiri, an economist at S&P Global Ratings, said in a report.

Read more: Brexit is the shot in the arm Britain's economy needs

British consumers have shown little sign of being hurt immediately by the 23 June referendum decision to leave the EU. Companies reported a slump in business in July before a bounceback in August.

The warning from S&P comes as accounting firm BDO declares it's business as usual - the firm's confidence tracker jumped back in August after hitting a three-year low in July, with companies telling the accountants they are still hiring, activity is still climbing and more are optimistic than pessimistic about the six months ahead.

Read more: PwC confident Britain has what it takes despite Brexit vote

And in another new report out today, the Lloyds regional purchasing managers index found that business activity in every region of the UK except Scotland returned to growth last month.

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