Posted 11 November 2016 By Steve Elliott, Business Recovery and Insolvency Partner
In Business Recovery & Insolvency
I had planned to report here the results of a Brexit impact survey carried out by the insolvency practitioners’ trade body “R3” but a quick review of my in-box has led me to other Brexit based predictions!
- R3 reported this week that three-in-four UK businesses (74%) say they have yet to feel any financial impact – positive or negative – from the 23rd of June vote to leave the EU.
- However, 16% , equivalent to 283,000 businesses, say the vote has already had a negative financial impact on them, compared to just 5% of businesses (85,000) who say the outcome of the referendum has had a positive financial impact.
The ICAEW Q3 Economic Forecast (a survey of business accountants) shows that:
- “business confidence has taken a major knock following the decision to leave the EU. Capital spending is likely to remain on hold pending clarity on the UK’s relationship with Europe.”
- ICAEW’s forecast for economic growth in 2016 has been downgraded from 2.0% to 1.8%, and further to 1.1% in 2017.
A Pinsent Mason (Solicitors) survey of more than 400 insolvency practitioners found:
- That 62 percent of the UK’s insolvency industry believes Brexit will lead to an increase in the number of business failures over the next year.
- That business confidence in the manufacturing and retail sectors has dropped. Almost half of the survey participants agreed that these sectors combined are most likely to be hit the hardest over other sectors such as financial services, hospitality and leisure and infrastructure; the real estate sector was also thought to remain vulnerable.
I wasn’t asked to express a view but this period of uncertainty cannot be good for business. Although the current corporate insolvency statistics remain broadly flat for the year, the next 6 months will be an interesting time!
To discuss this or anything else, please contact Steve Elliott on 01793 818300 or send him an email.