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Business plans on hold pending UK referendum

Britain is putting investment plans on hold as big companies become increasingly nervous about the outcome of the EU referendum.

Investment expectations and recruitment has fallen to a three-year low, and appetite for risk has fallen, according to a survey by professional services firm Deloitte [1].

Chief Economist at Deloitte, Ian Stewart, said “a fog of uncertainty has descended on the corporate sector” [1].

The survey showed that out of the 120 CFOs questioned, 75% from FTSE 350 and other large private companies backed Britain’s continued membership of the EU in the first three months of this year, up from 62% in the fourth quarter of 2015 [2].

But the survey also showed 83% of CFOs thought the level of uncertainty facing their business was above normal, high or very high, a big jump from 64% at the end of 2015, and the highest level in over three years [2].

The referendum represented the biggest single concern for UK businesses, ahead of slow growth in the euro zone.

“While voices on both sides of the debate argue about the potential economic impact of a “Leave” vote, the referendum appears to already be contributing to a slowdown,” David Sproul, Chief Executive of Deloitte, said [3].

[1] Financial Times. ‘Brexit causing ‘fog of uncertainty’ among financial chiefs’. next.ft.com

[2] Reuters UK. ‘UK firms putting plans on hold ahead of EU vote – survey’. uk.reuters.com

[3] Independent. ‘Big business backs staying in EU as deals are put on hold until after the referendum’.  independent.co.uk