Wednesday, 31 August 2016

Brexit angst prompts UK services firms to cut expansion plans – CBI

In World Economy News 31/08/2016

Optimism among Britain’s services companies has fallen sharply, with investment plans at their leanest for more than four years, as employers wait for clearer signs of what the Brexit vote means for them, a survey published on Tuesday showed.
The pace of growth in the three months to August was largely unchanged but expansion plans for companies in business and professional services were the weakest since May 2012, the Confederation of British Industry (CBI) said.
The CBI’s head of economic analysis and surveys, Anna Leach, said it was encouraging that employment numbers remained robust, especially in the consumer services sector, despite the shock decision by voters to leave the European Union in June.
“But looking ahead, the service sector faces a challenging environment in which to grow and invest, with uncertainty about demand weighing on firms’ minds,” she said.
The survey was conducted between July 28 and Aug. 12, covering 136 business and professional services firms and 61 consumer services firms.
Britain’s consumers have largely taken the June 23 referendum result in their stride but economists say firms are likely to rein in their spending while the country’s future relationship with the EU remains unclear.

Source: Reuters (Writing by William Schomberg; Editing by Louise Ireland)