London firms are now more pessimistic about the effect Brexit will have on the economy than the UK as a whole, new analysis has shown, despite being less daunted than the rest of the country by the prospect a year ago.
However, the capital’s businesses remain more confident about their trading prospects, hiring intentions and the economy, analysis by Lloyds Bank of its monthly business barometers showed.
Lloyds senior economist Hann-Ju Ho told City A.M.: “London firms’ optimism towards the UK leaving the EU saw a flip change from 2018 to 2019.”
He said that in 2019 “prolonged uncertainty disrupted planning and above-average optimism turned into a net balance of 19 per cent of the city’s companies” saying Brexit would be bad for business.
In Lloyds’s latest business barometer, a net balance of 26 per cent of surveyed London felt negatively about Brexit. This marks a change from November 2018, when firms felt relatively well-placed to tackle separation from the EU.
Nonetheless, Ho said “many companies in London will be anticipating the emergence of greater clarity in the coming weeks and months”.
Boris Johnson’s emphatic election win in December has provided the certainty that Britain will leave the EU on 31 January. Many analysts say this certainty will lead to the release of investment that was held up in 2019.
London firms are overall more confident than those in the rest of the country about the year to come, Lloyds data showed.
Ho said businesses should be able “to plan ahead with more confidence and could boost hiring intentions”.