UK business morale hits lowest since at least 2009 – IHS Markit

A tree covered in autumn foliage is seen with office skyscrapers around it during rainfall in the City of London, Britain, November 9, 2018. REUTERS/Toby Melville

LONDON (Reuters) – Bruised by uncertainty about Brexit, British businesses are now more pessimistic about the outlook than at any time since at least 2009, a survey showed on Monday.

Plans for hiring and investment across both manufacturing and services firms sagged, according to a quarterly report from data firm IHS Markit, which also compiles the closely watched purchasing managers’ indexes.

The survey, conducted over the second half of October, showed firms cited political uncertainty as the biggest factor weighing on confidence.

Prime Minister Theresa May last week published a draft divorce deal with the European Union that has drawn the ire of eurosceptics in her party, raising questions about her future as leader and sending the pound sharply lower.

The net balance of companies expecting business activity to rise in the next 12 months fell to 32 percent from 39 percent in the previous survey, marking the lowest reading since the IHS Markit Business Outlook Survey started in 2009.

“Reports from survey respondents widely indicate that Brexit-related concerns have weighed heavily on business investment and staff hiring plans,” IHS Markit economist Tim Moore said.

“Some of the slowdown in capex plans can be attributed to softer global demand patterns, but the latest UK figure is notably weaker than seen elsewhere across Europe and in other developed economies.”

Other business surveys have also shown a sharp slowdown in business investment plans ahead of Brexit in March 2019.

Reporting by Andy Bruce; Editing by Hugh Lawson

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