Brexit spurs biggest cut in UK business investment in 10 years: BCC

By William Schomberg

 

FILE PHOTO: Rain clouds pass over Canary Wharf financial financial district in London, Britain July 1, 2016. REUTERS/Reinhard Krause/File Photo

 

LONDON (Reuters) - British companies look set to cut investment by the most in 10 years in 2019 because of Brexit, even if Prime Minister Theresa May gets a deal to ease the country out of the bloc, an employers group said on Monday.

 

Business investment was forecast to fall by an annual 1.0 percent in 2019, the British Chambers of Commerce (BCC) said.

 

Weak investment by companies drags on productivity which puts a brake on wage rises and weighs on the overall economy.

 

"Political inaction has already had economic consequences, with many firms hitting the brakes on investment and recruitment decisions," Adam Marshall, the BCC's director general, said.

 

"Worse still, some companies have moved investment and growth plans as part of their contingency preparations. Some of this investment may never come back to the UK."

 

Many financial firms have set up operations in other EU countries and carmakers have reduced their expansion plans in Britain. BMW said this month it could move some output in the event of a no-deal Brexit.

 

In 2018, business investment fell in each of the four calendar quarters, the longest such run since the global financial crisis, official figures have shown.

 

Finance minister Philip Hammond says he expects a pickup in investment by companies once a Brexit deal is done.

 

But the BCC said that the diversion of resources to prepare for the risk of a no-deal Brexit and the high up-front costs of doing business in Britain, as well as questions over Britain's future ties to the EU, would limit any quick investment rebound.

 

The BCC said business investment was expected to grow by 0.6 percent in 2020 and 1.1 percent in 2021.

 

It lowered its overall growth forecast for Britain's economy to 1.2 percent in 2019 - in line with the Bank of England's latest forecast - from a previous estimate of 1.3 percent.

 

That would be the economy's weakest growth in a decade, reflecting a slowdown in the global economy as well as Brexit.

 

The BCC saw only a weak pickup, with growth edging up to 1.3 and 1.4 percent in 2020 and 2021.

 

It said its forecasts assumed that Britain would avoid a disorderly exit from the EU.

 

"A messy and disorderly exit from the EU would do real and lasting damage to the UK's economic prospects," Marshall said.

 

Prime Minister Theresa May expected to ask lawmakers once again to back her Brexit plan this week after they rejected it twice previously.

 

Also on Monday, property website Rightmove said the asking price of homes put up for sale rose by a monthly 0.4 percent in the four weeks to March 9, the weakest increase for that period since 2011.

 

Prices in London, where the property market has shown most weakness in the run-up to Brexit, fell by 1.1 percent.

 

"The closer you get to the wire without the clarity of an agreed way forward, the greater the propensity for buyers to wait and see rather than acting now," Rightmove director Miles Shipside said.

 

(Editing by Stephen Addison)

 

-- © Copyright Reuters 2019-03-18

Oops!

Not really surprising.

Many foreign companies wanted to trade within the EU, yet, did not want the typical red-tape bureaucracy that businesses have to go through in most EU counties.

The comparatively laissez-faire business model of Anglo-Saxon economies coupled with being in the EU was irresistible.

The UK received by far the biggest portion of direct foreign investment within the EU.

Now with Brexit looming, that advantage will be gone.

Waiting for the thousands “Project Fear” comment from a Brexiteer...

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2..

1..

42 minutes ago, welovesundaysatspace said:

Waiting for the thousands “Project Fear” comment from a Brexiteer...

3..

2..

1..

Project fear. Happy.

Actually Liam Fox on Sohpy Ridge yesterday gave a compelling argument on how Business is in the UK and it wasn't doom and gloom. Also unemployment is still low and the UK economy  is growing faster than any other in the G7.

 

As for London house prices. They have been over inflated for years and need to come down. No doubt the tin hat brigade will be stocking up on tin foods and pot noodles waiting for Armageddon.

 

Like a cult that predicts something and it doesn't happen, usually keep hoping that it will happen, eventually.

 

Edited March 18, 20197 yr by Laughing Gravy

2 hours ago, Joe Mcseismic said:

Not really surprising.

Many foreign companies wanted to trade within the EU, yet, did not want the typical red-tape bureaucracy that businesses have to go through in most EU counties.

The comparatively laissez-faire business model of Anglo-Saxon economies coupled with being in the EU was irresistible.

The UK received by far the biggest portion of direct foreign investment within the EU.

Now with Brexit looming, that advantage will be gone.

Actually, most of the countries in Western Europe, including all the most developed ones, are rated by the World Bank as very easy to do business in.

https://en.wikipedia.org/wiki/Ease_of_doing_business_index

15 minutes ago, bristolboy said:

Actually, most of the countries in Western Europe, including all the most developed ones, are rated by the World Bank as very easy to do business in.

https://en.wikipedia.org/wiki/Ease_of_doing_business_index

And the UK is far and away the easiest (UK 9 next is Ireland at 23) using your link.

3 hours ago, Laughing Gravy said:

Actually Liam Fox on Sohpy Ridge yesterday gave a compelling argument on how Business is in the UK and it wasn't doom and gloom.

Is that the same Liam Fox who claimed he would have all existing EU trade deals replaced by 30 March and utterly failed? 

 

3 hours ago, Laughing Gravy said:

Project fear. Happy.

Actually Liam Fox on Sohpy Ridge yesterday gave a compelling argument on how Business is in the UK and it wasn't doom and gloom. Also unemployment is still low and the UK economy  is growing faster than any other in the G7.

 

As for London house prices. They have been over inflated for years and need to come down. No doubt the tin hat brigade will be stocking up on tin foods and pot noodles waiting for Armageddon.

 

Like a cult that predicts something and it doesn't happen, usually keep hoping that it will happen, eventually.

 

Liam Fox. 

 

He of 'the easiest deal in human history', that Liam Fox?

2 minutes ago, Chomper Higgot said:

Liam Fox. 

 

He of 'the easiest deal in human history', that Liam Fox?

As it has been mentioned many many times and as trade minister. We can't make any trade deals until we leave the lovely, wonderful, protectionist boys club, called the EU.

 

I thought Chomps even you would have known that.

Reuters is very pro EU anti Brexit, so it joins the smear and fear campaign

 

5 minutes ago, anterian said:

Reuters is very pro EU anti Brexit, so it joins the smear and fear campaign

 

I agree totally with you and I stated that straight after the referendum on a thread here on TV but I was shouted down by some remainers on here, who are still here claiming Reuters were neutral. They are as biased as the BBC.

"Worse still, some companies have moved investment and growth plans as part of their contingency preparations. Some of this investment may never come back to the UK."

Money talks and BS walks. Lots of walking dead Brexit BS in UK so the money said "How about we move where we can maximize our investments?" It's what responsible businesses do

1 hour ago, Laughing Gravy said:

As it has been mentioned many many times and as trade minister. We can't make any trade deals until we leave the lovely, wonderful, protectionist boys club, called the EU.

In 2017, Fox said that the UK could "replicate the 40 free trade agreements before we leave the EU", so that there would be no disruption to trade.

 

Was he deliberately lieing, or just completely clueless?

 

 

 

  

Edited March 18, 20197 yr by welovesundaysatspace

6 hours ago, Laughing Gravy said:

Like a cult that predicts something and it doesn't happen, usually keep hoping that it will happen, eventually.

 

 

It was predicted and:

 

"Political inaction has already had economic consequences, with many firms hitting the brakes on investment and recruitment decisions," Adam Marshall, the BCC's director general, said.

 

"Worse still, some companies have moved investment and growth plans as part of their contingency preparations. Some of this investment may never come back to the UK."

 

It has happened.

 

It is happening.

 

It will continue to happen.

 

The cult is the Micawberish cult of Brexit:

 

"Welcome poverty!..Welcome misery, welcome houselessness, welcome hunger, rags, tempest, and beggary! Mutual confidence will sustain us to the end!"

                         Wilkins Micawber, from David Copperfield by Charles Dickens.

 

 

 

Edited March 18, 20197 yr by Enoon

2 minutes ago, Enoon said:

 

It was predicted and:

 

"Political inaction has already had economic consequences, with many firms hitting the brakes on investment and recruitment decisions," Adam Marshall, the BCC's director general, said.

 

"Worse still, some companies have moved investment and growth plans as part of their contingency preparations. Some of this investment may never come back to the UK."

 

It has happened.

 

It is happening.

 

It will continue to happen.

 

The cult is the "Micawber" cult of Brexit:

 

"Welcome poverty!..Welcome misery, welcome houselessness, welcome hunger, rags, tempest, and beggary! Mutual confidence will sustain us to the end!"

                         Wilkins Micawber, from David Copperfield by Charles Dickens.

 

 

 

 

Don't forget your tin hat.

2 hours ago, anterian said:

Reuters is very pro EU anti Brexit, so it joins the smear and fear campaign

 

Actually the were quoting the British Chambers of Commerce (BCC).

 

But carry on with the Brexiteers "smear the facts" campaign, you are fooling no one.

2 hours ago, anterian said:

Reuters is very pro EU anti Brexit, so it joins the smear and fear campaign

 

????????????

 

Oh so predictable!

UK is heavily reliant on foreign investment, which seems quite odd when it's on the verge of separating from the EU.

1 hour ago, welovesundaysatspace said:

Was he deliberately lieing, or just completely clueless?

My guess is both.

57 minutes ago, Laughing Gravy said:

 

Don't forget your tin hat.

The Brexiteers’ discussion 101:

1. Lie. 

2. Deflect. 

3. Ignore. 

4. Post a nonsense GIF. 

3 hours ago, Laughing Gravy said:

As it has been mentioned many many times and as trade minister. We can't make any trade deals until we leave the lovely, wonderful, protectionist boys club, called the EU.

 

I thought Chomps even you would have known that.

Perhaps you also know that trade deals take years in the making, what happens between ground zero and the first trade deal?

40 minutes ago, Basil B said:

Actually the were quoting the British Chambers of Commerce (BCC).

 

But carry on with the Brexiteers "smear the facts" campaign, you are fooling no one.

Just look at the headline. "Brexit". Not "Failed Brexit", which is what the UK has been subjected to the past three years under May's incompetent (though not really since she's achieved exactly what her handlers wanted from her) leadership. Brexit was voted for by the British people three years ago. It was not done. To put the blame for anything that is currently happening on a Brexit that never happened is more than mere bias, it is outright dishonesty. 

Much of this wonderful 'foreign investment' is simply asset stripping and the shifting of production abroad. I can give examples from chocolate to microchips. Britain's real problem is business overheads mostly as a result of its ridiculous social engineering culture. What sane company would invest in a country that has given someone like Corben sight of power.

Just now, usviphotography said:

Just look at the headline. "Brexit". Not "Failed Brexit", which is what the UK has been subjected to the past three years under May's incompetent (though not really since she's achieved exactly what her handlers wanted from her) leadership. Brexit was voted for by the British people three years ago. It was not done. To put the blame for anything that is currently happening on a Brexit that never happened is more than mere bias, it is outright dishonesty. 

Voted for by a small majority, so not by the British people but by some of them and by rights many should have changed their 'minds' by now. Brexit aint going to happen.

Just now, lineofentry said:

Much of this wonderful 'foreign investment' is simply asset stripping and the shifting of production abroad. I can give examples from chocolate to microchips. Britain's real problem is business overheads mostly as a result of its ridiculous social engineering culture. What sane company would invest in a country that has given someone like Corben sight of power.

Asset stripping and shifting of production is very important if you work at that firm and don't have a food bank near you

7 hours ago, Laughing Gravy said:

Project fear. Happy.

Actually Liam Fox on Sohpy Ridge yesterday gave a compelling argument on how Business is in the UK and it wasn't doom and gloom. Also unemployment is still low and the UK economy  is growing faster than any other in the G7.

 

As for London house prices. They have been over inflated for years and need to come down. No doubt the tin hat brigade will be stocking up on tin foods and pot noodles waiting for Armageddon.

 

Like a cult that predicts something and it doesn't happen, usually keep hoping that it will happen, eventually.

 

 

Now who would you believe, the British Chambers of Commerce, or a pro Brexit hardline politician like Fox?

 

Seems you believe Fox. Of course a politician would never lie to further their agenda. Just ask Boris, Farage or Gove.

 

Britain isn't out yet. Do you think many foreign businesses will want to invest in the UK after Brexit?

6 hours ago, bristolboy said:

Actually, most of the countries in Western Europe, including all the most developed ones, are rated by the World Bank as very easy to do business in.

https://en.wikipedia.org/wiki/Ease_of_doing_business_index

 

To be fair, the UK has much easier rules when it comes to business closures, downsizing, labor laws than many of the other EU nations.

 

I worked for an American conglomerate who had operations in many EU countries. The labor laws were much easier in the UK than France, highly regulated, Germany with its works councils, involvement of local mayor etc and the Netherlands were it was very difficult to terminate someone and people could insist on part-time working. 

 

It's relatively easy to open a business and do business. Reversing that is made very difficult in many countries.

4 hours ago, anterian said:

Reuters is very pro EU anti Brexit, so it joins the smear and fear campaign

 

Reality is very pro EU anti Brexit, so it joins the smear and fear campaign

58 minutes ago, usviphotography said:

Just look at the headline. "Brexit". Not "Failed Brexit", which is what the UK has been subjected to the past three years under May's incompetent (though not really since she's achieved exactly what her handlers wanted from her) leadership. Brexit was voted for by the British people three years ago. It was not done. To put the blame for anything that is currently happening on a Brexit that never happened is more than mere bias, it is outright dishonesty. 

Brexit = Brexit.

 

Now Brexit = Failed Brexit.

 

A cover for Brexiteer to do the usual and blame everyone else.