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Business unconcerned with Brexit, but worried about the UK economy

Despite political claims to the contrary, most of Britain’s FTSE 350 firms are unconcerned with Brexit.  A growing number are, however, worried about developments in the wider economy, according to a new survey by ICSA The Governance Institute.

Fewer than half the respondents (43%) rated a UK exit from Europe as potentially damaging and barely half (49%) of boards had even considered the implications of the UK leaving the EU.  What concern there was seems to be more among large companies:

“Uncertainty over the outcome of the EU referendum may be partly responsible for the gloomy economic outlook in the UK, but generally boards do not appear to be overly concerned about a possible exit. Respondents from the FTSE 100 seem to regard EU membership more favourably than the FTSE 250.”

When it came to the wider economy, the picture was gloomier.  Just 16 percent of company boards anticipated an improvement in the global economy, with even fewer expecting an improvement in the UK economy:

“Boards continue to be pessimistic about growth prospects in the UK and overseas. The UK position is particularly bleak with only 13% of respondents predicting any improvement in economic conditions, a significant drop from the 40% predicted in December 2015 and an even bigger drop compared with 74% in July 2015.”

While it would be wrong to suggest that there are no economic risks in a vote for Brexit, the FT-ICSA survey suggests that “project fear” has over-stated business concerns.  Cameron and Osborne may also be getting their excuses in early by planting the idea that the growing economic slowdown was the result of the EU referendum rather than being a consequence of the policies they have pursued since 2010.

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