Pessimism among UK companies jumps due to Brexit and trade war fears, research shows

The findings emerged as the IMF cut its global growth outlook on Monday

The number of UK chief executives who expect global economic growth to decline in the next year has tripled over the past 12 months, while almost three quarters of UK firms are expecting to be damaged due to Brexit, new data has revealed.

The findings emerged as the IMF cut its global growth outlook on Monday, and reissued warnings over the dangers of a no-deal Brexit and Donald Trump’s trade war.

A survey carried out by PwC found 34 per cent of CEOs are pessimistic about the economy for 2019, compared with 12 per cent this time last year, due to uncertainty.

Pessimism among chief executives globally rose at an even steeper incline, from 5 per cent to 30 per cent.

Optimism about growth within organisations slipped too, with 82 per cent of chief execs stating that they were confident about their revenue prospects, down from 84 per cent in 2018.

Policy uncertainty, protectionism and trade conflicts are the main concerns for CEOs, PwC said, and UK chiefs are more concerned about exchange rate volatility than their global counterparts.

Kevin Ellis, chairman and senior partner of PwC, said: “For the UK, CEOs growing uncertainty about where to expand presents an opportunity to attract new investment following Brexit. It’s time to talk up the UK’s credentials, not only as a competitive place for business, but as a fair and trusted one.

“We’re at a pivotal moment in economic and political history. Now more than ever, CEOs have the chance to reset the narrative on the role of business in society and build trust.”

Meanwhile, 73 per cent of companies are expecting to be damaged as a result of Brexit, according to a separate survey of FTSE 350 companies carried out by ICSA and the Financial Times.

The number of firms reporting Brexit as a principal risk has risen sharply from 39 per cent in the summer of 2018 to 56 per cent.

The research also showed that 81 per cent of respondents predict a decline in the UK economy, up from 55 per cent last summer. Just 2 per cent expect an improvement in economic conditions, the lowest level in five years.

“Brexit, inevitably, dominates the landscape but this survey is a timely reminder that there are many reasons why this is such a critical moment for boardrooms across the country. First, the need for vigilance, accuracy and insight on company performance in an ever more complex world.

"Second, powerful reasons for companies to re-double their efforts on issues ranging from diversity through to relationships with employees, customers and other stakeholders. And third, the scale and scope of risks to manage are growing, from cyber security through to political uncertainty around the world.”