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Business confidence in Brexit negotiations evaporates – yet the first casualty is perception rather than profit

Created: November 2017

A clear majority of business leaders are worried – but increasingly fatalistic – about Brexit, according to our new analysis.

We found an overwhelming majority (97%) of business owners worry about the impact Brexit will have, while fewer than a tenth (9%) expect Britain’s Brexit negotiators to secure a good divorce deal from the EU.

The findings come after the five preliminary rounds of Brexit talks between the UK and the EU ended in deadlock, and Theresa May’s attempt to kickstart the stalled talks with a hastily arranged trip to Brussels.

The lack of progress in the Brexit negotiations appears to be weighing on sentiment, with two fifths (39%) of the nearly 1800 business leaders polled saying they are more worried about Brexit now than they were a year ago.

Just 8% said they are either less worried now, or were never worried, about the prospect of Brexit.

For now the uncertainty over what Brexit will eventually look like has hit perceptions harder than profits, and 30% of the business owners polled said the vote for Brexit has yet to have any material impact on their bottom line.

While a quarter (24%) said they are delaying big decisions until things are clearer, nearly as many (22%) are enjoying an upside from the weak Pound – and have found it easier to sell overseas.

However almost a fifth (18%) reported a fall in demand since last year’s Brexit referendum and 13% said their margins are being squeezed by rising input costs.

With the true impact of Brexit still hard to gauge, sentiment remains stoic. Respondents were asked to sum up their mood by choosing from a range of popular expressions – and a whopping two-thirds (65%) opted for ‘Keep calm and carry on’.

A pragmatic 30% described themselves as “hoping for the best but fearing the worst”, while 5% picked the Dad’s Army catchphrase “We’re doomed!”

Toby Ryland, partner, commented:

“For all the fire and brimstone being talked about Brexit, our research shows that in reality most businesses are playing a waiting game rather than battening down the hatches.

“While virtually all business owners worry Brexit will affect them eventually, for now most are soldiering on – even if many are postponing big decisions until there is greater clarity on what Brexit will actually mean.

“The current limbo is having a mixed effect, with more businesses benefitting from the weak Pound than reporting a drop in demand.

“But for all the business community’s stoicism, it’s striking how little confidence it has in Britain’s Brexit negotiators. With two fifths of business owners more worried about Brexit now than they were a year ago, the lack of progress in the Brexit negotiations is clearly taking its toll.”

Toby Ryland, Partner
T 020 7874 7959
E tryland@hwfisher.co.uk