UK businesses are becoming increasingly nervous about Brexit, according to a survey by the British Chamber of Commerce (BCC).
Its quarterly survey of 5,600 firms found that the proportion of services companies trying to recruit is at its lowest for 25 years, and those that were hiring were finding it difficult.
Separately, a survey by Deloitte showed that UK businesses are increasingly pinning their hopes on a positive outcome to the Brexit negotiations, and the rising possibility of a “no deal” outcome dragged on sentiment in the third quarter.
As a result, companies are cutting their hiring and investment plans.
The survey said that reducing costs is now the top priority for companies, and executives are more focused on this issue than at any time in the last eight years. Echoing the BCC’s findings, the proportion of companies experiencing recruitment difficulties or skills shortages rose to almost half in Q3.
On the high street, the British Retail Consortium (BRC) said on Tuesday that UK retail sales rose at their slowest pace in five months in September, up just 0.7% compared to the 1.3% growth reported the month before. On a like-for-like basis, sales for the month were down 0.2% compared to September last year, down from a 0.2% increase in August.
The International Monetary Fund (IMF) downgraded its outlook for global growth this week, blaming the trade wars, rising interest rates and geo-political worries. It now forecasts growth to be 3.7% this year and next, down from its previous forecasts of 3.9% in both years.
UK GDP data from the Office for National Statistics (ONS) showed that although economic growth stalled in August, the economy expanded by 0.7% in the three months to the end of August, reflecting the uptick in spending in the hot summer months. The data exceeded expectations of a 0.6% rise.
It is estimated that, after a difficult start to the year caused by bad weather, the UK economy is now on track for moderate growth equating to around 1.5% per annum - below the long-term trend of around 2.0% - likely a result of Brexit uncertainties.
Brexit worries are also being blamed for a continued downwards trend in the property market. A survey by the Royal Institution of Chartered Surveyors (RICS), showed that prices are falling, buyer enquiries are at a record low and sales are taking an average of 19 weeks to complete - the longest since the RICS began collecting the data. Although London was worst hit, the falling prices in the capital were now expanding out to other areas such as the South East and East Anglia.
Main source of information: Company Report and Accounts, Bloomberg
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