Brexit: At First It Was Optimism, Now Anxiety Starts

Economy Jamie Simon
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Confidence in the prospects for the British financial services has achieved the lowest share since the financial crisis, reveals a survey conducted by the lobby group CBI and consulting firm PwC, reports Reuters.

According to the survey, optimism firms fell for the third consecutive quarter in the quarter which ended in September, marking the longest period of decline since 2009.

Over half of the financial companies surveyed said that the overall impact of Britain’s decision to leave the European Union is negative, only one firm in ten identifying as positive.

‘Given the deep concern expressed by companies about the impact of the Brexit, in particular, the risks to the economy in the coming years, the government needs to temper fears coming up with clear plans for negotiations out of the EU,’ said Rain Newton-Smith, CBI chief economist.

In general, the most pronounced decline in confidence was recorded among the financial firms, construction companies, and investment managers. The decline was less felt among banks. Confidence was relatively stable among the insurance companies, states The Guardian.

When asked about the main fears of Brexit, financial firms cited the negative impact on the economy, limited access to EU markets and the prospect of decreasing yields.

Andrew Kail, from PwC, said that this continuous decline in confidence is worrying, adding that companies are thinking about moving quarters.

‘Many of our customers analyze their options, including restructuring and relocation operations.’

According to Kail, there is a danger that the status of Britain’s major financial center will be affected. ‘Two million people in the UK are working directly or indirectly in the financial services sector,’ said Kail, quoted by The Guardian.

Low-interest rates and problems with the changing regulatory and technological changes are challenges facing the sector. Now the Brexit added these issues.

Three-quarters of the heads of British companies are considering moving their operations abroad, a recent survey said.

KPMG’s survey among 100 heads of British companies shows that 86% are confident in the growth prospects of their companies, while 69% are optimistic about the growth prospects of the UK economy over the next three years.

However, 76% of them said they are considering either to relocate their operations outside the UK following the vote on 23 June.