LONDON: Nearly two-thirds of British businesses are “optimistic” about their future in the wake of the Brexit vote, a major survey has disclosed. A poll of 34,000 companies by the Institute of Directors found that 60 per cent of businesses are “optimistic” or “very optimistic” about the year ahead. The businesses, predominantly small or medium-sized, conceded there is “uncertainty” of the vote to leave the European Union. However, their positivity is in marked contrast to comments by the bosses of Britain’s biggest companies, some of whom have criticised Brexit and even threatened to relocate out of the U.K. It came as the latest edition of the World Economic League Table said that Britain will overtake France’s economy in the years just after Brexit despite the recent fall in the value of the pound. The latest table puts Britain in sixth position, after being narrowly overtaken by France in the wake of the Brexit vote because of currency fluctuations. Britain is forecast to catch up with France in 2021, just two years after Brexit is expected to take place. According to the forecast, conducted by the Centre for Economics and Business, the UK will have overtaken France by 2026. However, Britain will have slipped to eighth in the global league table by 2030 because of the performance of India and Korea, the forecast found. Theresa May’s Government has vowed to ensure that small and medium businesses thrive after Britain leaves the EU.
According to the IoD survey, the “net optimism” figure for Britain’s businesses is the highest it has been at any point since the June referendum. Some 60 per cent of companies expect to increase revenues in 2017 against 15 per cent expecting them to fall. However, many of the respondents said they had concerns about the economy “that could see their expectations prove over-optimistic”, the IoD said. Half of the companies surveyed said that current UK economic conditions are having a negative effect on their business’ growth, and 45 per cent felt our uncertain trading status with the EU is holding them back. Four in ten complained of a skills shortage and a lack of employees with the requisite skills, demonstrating the need for clarity on a long-term skills strategy and an immigration system that gives businesses access to the talented people they need. If those barriers to growth prove significant and revenues are squeezed, more than a third of companies suggested that they would consider reducing headcount (38 per cent) or postponing planned investment (40 per cent). Mrs May and Philip Hammond, the Chancellor, have both repeatedly made clear that they will not take any decisions during the upcoming Brexit negotiations that harm the UK economy. Many UK businesses want the Government to ensure that Britain still has access to the single market after Brexit. However, Brussels leaders are insistent that continued access to the single market would mean Britain being forced to accept freedom of movement rules even after Brexit.
Freedom of movement allows all European citizens to come and live and work in the UK. Mrs May has made clear that freedom of movement is a “red line” and that she will not allow Britain to be unable to control EU migration. Simon Walker, Director General of the IoD, said: “Businesses are becoming used to uncertainty, and while some speculate on what our relationship with Europe might look like in the years to come, employers are getting on with the job of growing their businesses and delivering jobs for the UK. “A steady if unspectacular Autumn Statement has clearly settled nerves, and the early signs of the Industrial Strategy are certainly positive. “Business will now look to Government to lay the groundwork for growth, and considering the skills shortage revealed in this survey, they should start by guaranteeing the status of EU citizens currently working for British businesses.” According to Cebr, the United States will remain the world’s most successful economy until 2029, when it is finally overtaken by China. India will become the third largest economy in the world by 2024, overtaking Japan. It will also be ahead of Germany, France and the UK. Russia will drop to fourteenth place by 2030 because of weakening oil prices.