New data has indicated that UK business confidence returned to pre-EU referendum levels during September, driven by a surge in optimism for both the national economy and organisations‘ own future prospects.
According to the latest YouGov/Centre for Economics and Business Research (Cebr) UK Economic Index, business confidence rose to 112.4 last month, putting it at around the levels it was before the June referendum. In June it was at 112.6 and in May it stood at 112.5.
The greatest increase in business confidence – from 35 percentage points in August to 44 percentage points in September – came from increasing optimism about the UK economy for the next 12 months, which YouGov determined after interviewing 500 decision-makers from a range of business firms, including many in retail.
Meanwhile, there has been a 10 percentage point decrease in the number of businesses feeling pessimistic about the country‘s economy in the next 12 months.
In addition, for the first time since the Brexit referendum a majority of firms – 53 per cent compared to 48 per cent in August and 46 per cent in July – felt positive about their own performance in the next year. In June, 53 per cent were optimistic.
“It is now clear that business confidence took a short-term stumble in the wake of the EU vote instead of a long-term fall,” Cebre director Scott Corfe said.
“The panic that gripped businesses in the aftermath of the referendum has subsided and they are now much more level-headed and optimistic about the future of both their own organisations and the UK‘s economy in general.”
YouGov chief Stephen Harmston echoed the sentiments.
“While both suffered a wobble immediately after the vote, both consumers and organisations have realised that very little has actually changed yet and are now treating things as ‘businesses as usual‘,” he said.
Both organisations warned that the research was carried out before the Tories‘ conference this week, in which talk of a “hard Brexit” and immigration restrictions dominated the agenda.
“We won‘t know until next month what impact speculation about whether the government is planning a ‘hard‘ and ‘soft‘ Brexit will have on business confidence,” Harmston said.
“We will have to wait to see whether the rebound in confidence is itself hard and resilient to such talk or whether it is soft and causes another spasm of panic among organisations.
“Whichever it is, these figures could well represent the end of the pre-Brexit honeymoon period.”