LONDON, U.K. - According to the latest survey conducted by the Confederation of British Industry, Brexit is revealed to have negatively influenced the investment decision of more than two-thirds of firms.
Warning that “today’s investments are tomorrow’s jobs,” the CBI survey showed that over 40 percent of businesses in the country believe Brexit has already affected their investment decisions.
Further, of those who have been influenced, the vast majority said the impact has been negative.
The CBI, which represents 190,000 U.K. businesses, said that it questioned 357 businesses, including those who are not members of the CBI and of those who said Brexit has affected their investments - 98 percent said it had led to investments being either delayed or called off.
According to Rain Newton-Smith, chief economist with the CBI, it was “reassuring” that the majority of firms hadn't allowed uncertainty caused by the U.K.’s impending departure from the EU to change their spending plans.
She explained, “It is reassuring that the majority of businesses that responded to our survey do not feel that Brexit has changed these vital spending plans. But we must have our eyes wide open: an overwhelming number of those that did report an impact said it was negative. Government must do all it can to reverse this. Today’s investments are tomorrow’s jobs. The Government’s increasingly clear commitment to a single transition stage is welcome.”
Further, companies reporting that Brexit had negatively influenced their investment decisions, cited general uncertainty over the U.K.’s future relationship with the EU.
Meanwhile, the only positive impact the body reported was the relative weakness of the dollar against the sterling.
Newton-Smith said, “Firms are making investment decisions right now, that will last for years to come. They need more sense of clarity and continuity to support jobs and prosperity. To help British businesses remain optimistic and keep uncertainty at bay, the Government must work quickly to agree terms of the transition and future trading arrangements. That's why the CBI has suggested staying in the single market and a customs union until a final deal comes into force. This is the simplest way of ensuring companies don't face a damaging cliff-edge and that trade flows can continue without disruption.”
The CBI has been calling for a softer Brexit ever since Prime Minister Theresa May lost her parliamentary majority in June's general election, which many saw as a loss of her mandate for a hard Brexit.
Last week, the CBI called for Britain to stay in the Single Market and customs union until a final EU deal is in force.
The CBI said it conducted its survey between June 28 and July 3.