London and South East Hit Hard by Brexit
The latest figures from the Lloyds Bank Purchasing Managers Index show that London’s business activity has fallen by four points since the Brexit vote, representing the sharpest decline in the country.
Plunging to 44.4 in July, the Index shows business activity at its lowest since 2009.
Speaking to the Evening Standard, Lloyds Banking Group’s managing director of mid-markets and SME banking, Tim Hinton said: “As expected, business activity has slowed on the back of the EU referendum result.
“While the impact has been felt across the UK, companies in the south-east and London were hit particularly hard.
“UK firms will likely face challenges in the short-term but the Bank of England’s decision to cut interest rates could help crystallise important investment decisions and in turn support the economy.”
Why the downturn?
Businesses across the UK are facing a number of challenges. A weaker sterling and a drop in consumer spending is now biting hard. But the most important factor working against commercial organisations is uncertainty.
It was reported in last week’s Sunday Times that Prime Minister, Theresa May could be forced to delay triggering Article 50 because international trade departments may not be ready for the massive workload associated with leaving the EU.
French and German elections may also hold things up. Ministers have allegedly told senior City executives that Britain might not invoke Article 50 until France has voted next May or even until after the German poll in September.
“Ministers are now thinking the [Article 50] trigger could be delayed to autumn 2017,” said another source, who had discussions with two senior ministers. “They don’t have the infrastructure for the people they need to hire. They say they don’t even know the right questions to ask when they finally begin bargaining with Europe.”
A strong economy needs a stable political environment in which to thrive. Further uncertainty as to when, (and even if) we will eventually leave the EU will lead to local and international investors shying away from major public infrastructure and private development projects. Employers will also be reluctant to take on new staff until there is some certainty as to how Brexit will eventually happen and the impact invoking Article 50 will have.
Uncertainty is bad news, not only for EU nationals residing in Britain, unsure of their residency status, but for businesses trying to get ahead and employees looking for work.
OTS Solicitors is regarded as one of the best Immigration solicitors in the UK. If you need advice on permanent residence Cards or British Citizenship, please phone our office on 0203 959 9123 to talk to one of our team.