Brexit and optimism… are we finally there?
Whisper it quietly but is business finally starting to feel optimistic about Brexit? After months of Remainers being paralysed by the fear of leaving the EU, might there now be reasons to be cheerful?
Certainly that appears to be the impression given by a recent survey by Deloitte, which suggests that optimism continues to grow from the post-referendum lows as doomsday predictions about Brexit’s impact on the UK economy have failed to materialise.
Some 130 CFOs from companies listed on the FTSE 350 took part in Deloitte’s latest confidence survey, representing 91 companies worth a combined £376 billion. The survey was carried out shortly before Theresa May triggered Article 50 to begin the process of the UK leaving the EU, and found that 31% of CFOs felt more optimistic about the future of their businesses than they did three months ago. That marked a 4% increase compared to the end of 2016, and a 28% increase compared to the immediate aftermath of the referendum.
So are our nation’s CFOs right to be more cheerful? Businesses will be have been refreshed to see that the UK economy grew by more than previously reported in the final three months of 2016, according to the latest official estimates. GDP increased by 0.7%, up from 0.6%, with the upward revision largely due to the strength of our manufacturing industry. Meanwhile, the UK’s independent budget watchdog, the Office for Budget Responsibility, recently revised up its growth forecast for this year from 1.4% to 2%.
The fall in the pound has helped British exporters, UK unemployment continues to fall steadily, whilst the UK continues to enjoy record low interest rates. And there is no sign of doom and glow for investors either, with UK stock markets at record highs and property prices continuing to rise; up by 4.5% in a year according to the Nationwide, and by 5.1%, according to the Halifax.
But before getting carried away, it is true that many things could still go wrong. The UK has not actually left the EU yet. All eyes will be focused on Theresa May and her negotiating team to see what kind of deal and what level of access to the EU’s single market, Britain will walk away with. Yet as long as long as UK consumer-confidence remains high, the inflow of better-than-expected economic news should likely continue.
Businesses are fully aware that Brexit will be a challenge, but it is one we believe that UK businesses and their leaders are more than capable of rising to.Talk to Barnes Roffe today