British business confidence has fallen sharply in the aftermath of the vote to leave the European Union (EU), a new research revealed.
The share of businesses that reported feeling pessimistic about the British economy doubled in the week after the Brexit vote on June 24, according to the YouGov and the Centre for Economics and Business Research (CEBR).
The figure jumped from 25 per cent the week before the referendum to 49 per cent, BBC reported.
Falling confidence can lead companies to pull back on investment and hiring.
Scott Corfe, director at the CEBR, said that the figures indicated a “significant shock reaction” among British businesses following the vote last month.
“Businesses are clearly spooked by the referendum result and they’ve reined in their intentions for capital spending. They’ve reined in their expectations for exports and domestic sales growth,” Corfe told the BBC on Monday night
“And business confidence is a leading indicator for where the economy is heading over the coming quarters. What it suggests is that the economy is in for quite a significant slowdown over the next three to six months.”
Business expectations for UK sales, exports and investment all dropped, according to the research. The index for capital investment plans fell from 108 in the week before the vote to 100.1.
A figure above 100 indicates growth, while below 100 suggests contraction.
Expectations for exports fell from 115.3 to 99.8, suggesting falling sales overseas.
The research said consumer confidence had fallen back to its lowest level since May 2013.