The growing threat of non-agreement Brexit has set the UK on the path for the biggest downturn in business investment since the financial crisis, UK industry federation has warned.
Paves the way for weaker future economic growth, the CBI warned that corporate spending in the UK economy was down 1.3 percent in 2019 compared to a year ago – the steepest fall since the last recession in 2009.
Business Lobby the warning that Brexit's uncertainty prevented the companies from investing, stunting the economy and risking Britain falling behind its G7 competitors.
Government Newton-Smith, CFO at CBI, said: "For any business it's hard to make settlement decisions now. When the risk of a non-agreement Brexit feels very real at the moment, why would you make a big decision now? will wait and see until the end of October, however, the main risk is that we fall off a brew of non-agreement Brexit. "
Fear of a non-business management for business, shrinking by 0.4% last year, in one marked contrast from other major economies, where the investment has continued to increase. Expenditure from businesses on new technology, buildings, and equipment is critical to boosting productivity, which has stumbled over the past few years.
The last time investment investment fell further was in 2009, when widespread chaos in the financial crisis led to a 1
Both leaders of Tory, Boris Johnson and Jeremy Hunt have said that They would be prepared to leave the UK outside of a deal in late October. The potential damage that such a scenario can trigger comes at a time when global growth is slowing down the US-China trade conflict and weighing on the UK growth.
Despite the growing risks to the economy, the CBI said it continued to assume that Britain and the EU could reach an agreement that would mean a smooth transition to a new trading relationship.
It is estimated that GDP growth will ease slightly to 1.4% in 2019, before a slight acceleration to 1.5% by 2020. The UK economy grew by 1.5% in 2018.
A separate report from the EY Item Club's financial forecasting group found that the delay of the Brexit deadline beyond Halloween could have a negative impact on the economy as the uncertainty towards businesses would be prolonged.
An expansion will mean that GDP growth will be lowered to 1.3% next year, compared with a forecast of approx. 1.5%. However, Brexit will not be worse for the economy, which triggers a decline that can turn into a recession.
EY Item Club said the growth could fall to 0.3% by 2020 during a non-agreement Brexit, before improving to 1.1% in 2021.
The mood echoed in a Deloitte survey by CFOs , who found that eight out of 10 believed that the long-term business environment would deteriorate as a result of the UK leaving the EU.
Pessimism about the short-term effect remains high, and 62% of the finance directors expect to reduce employment – the highest level in three years.
Ian Stewart, CFO of Deloitte, said: "Events over the past three years and recent news suggesting that the economy has slowed down in the second quarter have raised concerns about the impact of Brexit. This is not just a matter of the The long-term outlook, Brexit has not happened, but it seems like a drag on corporate feelings and expenses. "