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Friday, January 03, 2020

Tory Government still havent convinced business on their Brexit plans

Boris Johnson may talk a good story, but he has still not convinced the people who matter that his so-called timetable for exiting the EU and delivering a trade deal is deliverable.

Any idea that the Tories were the party of business was lost some time ago in the mists of Brexit fantasy, however now that we are faced with an 80 seat Tory majority, a Prime Minister who struggles with the truth, and the cliff edge looking a much more realistic destiny, the economy's only hope is that business confidence somehow holds up.

Alas, if this Guardian article is anything to go by, businesses are still having trouble believing anything they are told by this government. The paper says that a Bank of England survey has found that growing numbers of business leaders in the UK believe Brexit uncertainty will take longer to resolve than Boris Johnson pledged before the election:

According to the central bank’s decision maker panel, which surveys almost 3,000 chief financial officers from small, medium and large UK firms, as many as 42% said they thought the lack of clarity over Brexit that their business faced would not lift until at least 2021, up from 34% in November.

The findings come as factory output across the UK plunged in December at the fastest rate in almost seven and a half years, according to a separate survey. Both Brexit uncertainty and a wider manufacturing downturn around the world weighed on businesses.

In a sign of the stress firms face, IHS Markit and the Chartered Institute of Procurement and Supply said that manufacturing production levels fell more in December than they had since July 2012. Factory output also fell sharply in Germany and other EU nations. Activity levels have slumped around the world as the US-China trade dispute continues.

Nearly half the firms surveyed still class Brexit as an important source of uncertainty for their business, leaving the economy poised on a precipice in terms of business confidence and future prosperity.

Without certainty, there will be no investment and that means that any hope of better output and productivity may well be dashed. Despite Boris Johnson's fantasies Brexit is going to be a major jolt to the country's economy and our standard of living. This survey just adds to that expectation.
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