U.K. Business Expectations Fall ‘Off a Cliff’ After Brexit Vote

(Bloomberg) -- U.K. business confidence dropped and pessimism about the economic outlook almost doubled in the week after Britain voted to leave the European Union, according to a survey.

An index published by YouGov Plc and the Centre for Economics and Business Research on Tuesday tumbled to 105 from 112.6 in the three days ended June 23, the referendum date. The survey, which was carried out between June 28 and July 1, also found the proportion of businesses that are pessimistic about the economic outlook climbed to 49 percent from 25 percent.

“These figures show what is happening on the ground and they suggest a significant shock reaction,” said Cebr Director Scott Corfe. “Not only are businesses feeling much more pessimistic in general about the state of the economy, but their own expectations for domestic sales, exports and investments over the next 12 months have gone off a cliff.”

The data come as markets, politicians and households alike attempt to gauge the fallout from Brexit, which has created a political vacuum in the U.K. at a time when there is deep uncertainty about future trade terms with the EU, the destination for almost half of British exports.

Almost three quarters of economists surveyed by Bloomberg expect the U.K. to slide into recession and Bank of England Governor Mark Carney says that the outlook for the economy has “deteriorated.” He will speak at a news conference at 11 a.m. in London after the release of the central bank's bi-annual Financial Stability Report.

To contact the reporter on this story: Lucy Meakin in London at lmeakin1@bloomberg.net. To contact the editors responsible for this story: Paul Gordon at pgordon6@bloomberg.net, Andrew Atkinson, Stuart Biggs