A third of firms expect negative impacts on their investment decisions in the year following Brexit, the Bank of England (BoE) claims.
In the monthly ‘Agents’ summary of business conditions’, the BoE reported that while few firms expected a sudden change in investment decisions, post-Brexit uncertainty had already led to delays in decision-taking, such as capital spending.
“Around one third [of firms surveyed] expected some negative effects over the next 12 months, with reports of a ‘risk-off’ approach to expenditures and some imminent plans for spending slipping,” the report read.
There are also claims that credit conditions have tightened and investment decisions were reconsidered or delayed until after the EU referendum, according to the Bank of England (BoE).
The BoE’s report stated that business had just begun to implement new strategies in response to the referendum result, but sought to maintain ‘business as usual.’
As a result, few of the firms surveyed expected a sudden change in investment decisions, though uncertainty still lingers.
The referendum result did not appear to affect the willingness of banks to lend. However, there were indications that the demand for credit was easing, in addition to lower expectations for investment spending.