UK businesses least confident in 7 years ahead of Brexit

A pedestrian holds shopping bags branded with the Union Flag on Oxford Street in London. (Bloomberg pic)

LONDON: Confidence among UK businesses plunged to a seven-year low this month and consumers remained pessimistic about the economic outlook as lawmakers failed to provide further clarity about the nation’s exit from the European Union.

A report from Lloyds published Thursday showed a gauge of optimism among firms dropped sharply as fewer companies expected activity to increase.

The stress of leaving the European Union without a settled plan for future ties with the UK’s biggest trading partner is taking its toll. Prime Minister Theresa May this week conceded that exit day may need to be postponed as she tries to get her withdrawal deal through Parliament.

Consumers presented a slightly less bleak view than businesses, with a separate GfK gauge of expectations for the UK’s general economic situation for the next 12 months stabilising.

Even so, it’s gloomy. A headline measure of confidence stayed close to the lowest since 2013, GfK said.

“The continuing depressed sentiment towards the general economic situation might point towards the calm before the storm of post-Brexit headwinds and potential negative economic outcomes,” said Joe Staton, client strategy director at GfK. “It is frankly amazing that confidence is so stoic and stable in a world of sharp political instability and fear of the unknown.”