U.K. Economy ‘Uninspiring’ in Run-Up to Brexit Vote, BCC Saysby
Says businesses need clear leadership on EU negotiations
BRC survey finds like-for-like sales down annual 0.5% in June
The U.K. economy went into the referendum on European Union membership with little momentum, according to the British Chambers of Commerce.
Growth was “uninspiring” in the run-up to the June 23 vote, the London-based lobby group said in its quarterly outlook published Tuesday. Services firms’ domestic and overseas sales fell, while a gauge of manufacturers’ sales expectations fell to its lowest level since 2012.
The findings underscore the risks facing the British economy in the wake of the Brexit vote, which has dampened confidence and roiled financial markets. Bank of England Governor Mark Carney is due to testify on financial stability on Tuesday amid expectations that policy makers will cut the benchmark interest rate from a record-low 0.5 percent this week.
The political crisis that has engulfed Britain since the referendum eased on Monday as Home Secretary Theresa May prepared to succeed David Cameron by mid-week after her only rival in the Tory leadership contest stood aside. Investors had been braced for a nine-week campaign to choose a new prime minister. U.K. stocks and the pound rose.
“Many businesses have been operating in something of a holding pattern for some time,” said Adam Marshall, acting director general of the BCC. “Business confidence would be buoyed by strong and clear leadership, both on the timeline for EU negotiations and on the big decisions unrelated to our future relationship with the EU.”
In a separate report Tuesday, the British Retail Consortium said that like-for-like retail sales decreased 0.5 percent in June from a year earlier. While they slowed toward the end of the month, it’s too early to say whether this trend will continue, BRC Chief Executive Officer Helen Dickinson said in a statement.