Brexit batters UK confidence as consumers, firms feel the heat

Anti-Brexit campaigners wave Union and EU flags outside the Houses of Parliament in central London. (AFP pic)

LONDON: Brexit uncertainty is leaving British consumers and businesses increasingly nervous.

As the nation goes into the new year without any clarity on its future relationship with the European Union, GfK’s index of sentiment has fallen to the lowest in five years, a report Friday showed.

Firms are also feeling the heat, with a separate release from Lloyds showing confidence has slipped to the lowest level since June 2016 – the month of the Brexit referendum.

With Prime Minister Theresa May facing continued opposition to her deal with the EU, fears of the UK crashing out of the world’s largest trading bloc have increased.

Cabinet ministers agreed earlier this week to implement “in full” plans for a no-deal break, including 3,500 troops put on standby and £2 billion (RM10.6 billion) of funds made available for contingencies.

The UK is due to leave the EU in just over three months – with or without a divorce deal – and Friday’s reports round off a week that has laid bare the impact the deadlock in Parliament is having on the real economy.

Retailers have complained about an abysmal holiday season, reports showed that house prices are weakening and the Bank of England said uncertainty around Brexit was intensifying.