80% of businesses say Brexit is hitting investment decisions

London, UK: Eight out of ten firms say Brexit has had a negative effect on investment decisions, according to new CBI research on business preparations.

A survey of 236 firms, representing 101 large companies and 135 SMEs, also revealed the majority will implement damaging contingency plans, in the absence of greater certainty on Brexit, by December. Carolyn Fairbairn, CBI director-general, warns: “The situation is now urgent. The speed of negotiations is being outpaced by the reality firms are facing on the ground”.

Almost 1 in 5 firms say the point of no return for triggering their plans has already passed. Contingency plans include cutting jobs, adjusting supply chains outside the UK, stockpiling goods and relocating production and services overseas.

Many firms are now planning for a “no deal” scenario, the survey adds, with severe implications for people’s livelihoods on both sides of the Channel. “Unless a Withdrawal Agreement is locked down by December, firms will press the button on their contingency plans. Jobs will be lost and supply chains moved,” says Fairbairn.

“Uncertainty is draining investment from the UK, with Brexit having a negative impact on 8 in 10 businesses. From a multinational plastics manufacturer which has cancelled a £7m investment, to a fashion house shelving £50m plans for a new UK factory, these are grave losses to our economy.

“The knock-on effect for the UK economy would be significant. Living standards would be affected and less money would be available for vital public services including schools, hospitals and housing.

“Many firms won’t publicise these decisions, yet their impact will show in lower GDP years down the line.”

The survey was carried out between 19 September and 8 October.

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