UK businesses warn of investment cuts after Brexit

27 June 2016

UK businesses have warned that Brexit would trigger investment cuts, hiring freezes and redundancies as the consequences of leaving the EU threatened further destabilisation of markets this week.

According to the survey by the Institute of Directors (IoD), the majority of businesses believed Brexit was bad for them, and it had come even as fears increase that investors would wipe billions more pounds off share values this morning, and signs that the pound, which hit a 30-year low on Friday, was coming under further pressure from trading in Asia.

Sterling dropped 1 per cent as the Asian markets opened late on Sunday.

Meanwhile, George Osborne would make a statement this morning ?to provide reassurance about financial and economic stability in light of the referendum result as also the actions that he and the rest of the government would be taking to protect the national interest over the coming period.

According to the IoD, a quarter of the members polled in a survey were putting hiring plans on hold, while 5 per cent said they were set to make workers redundant.

According to two-thirds of those polled, the outcome of the referendum was negative for their business.

Meanwhile, a number of companies would likely impose a hiring freeze following the UK's vote to leave the EU, according to a leading business group.

However, according to Gerard Lyons, chief economic strategist at Netwealth and a former adviser to Boris Johnson, even though there was short-term uncertainty, in the long-term the UK would be better positioned within the global economy.

He believed that the UK was gaining control of its own destiny as it distanced itself from stifling EU regulations.

Simon Walker, director general of the Institute of Directors, told the BBC's Today programme, "Business leaders are very, very concerned. Nearly half of them expect the other member states to punish Britain."

According to Walker, people who voted for Brexit did not realise they were voting "for constitutional and economic chaos", but he added half his members did think they could keep going.

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