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6/13/16

Britain: EU referendum fears weighing on company orders and investment

Orders among UK firms have fallen to their lowest level for almost three years as growing worries over this month’s EU referendum hit the British economy.

Accountancy firm BDO reports that company investment is flatlining, forcing them to rein in their hiring plans. It fears that economic growth could fall sharply unless firms bolster their investment plans later this year.

Peter Hemington, a partner at BDO, says Brexit uncertainty has cast a long shadow over the economy and that growth expectations among UK companies have now fallen for the 10th month in a row.

“Private sector capital investment has been sluggish throughout this recovery, and recent official figures show sharp falls – no doubt related to Brexit fears. This fall has no doubt contributed to UK businesses’ expectation that economic growth will fall behind its long term trend for the first time in nearly three years,” said Hemington./

The BDO’s output index – a measure of orders that firms have on hand – slumped to 99.7 last month, from 100.6 in April.

This is the first time since September 2013 that it has fallen below 100, a level consistent with UK long-term trend growth at around 2%.

Read more: EU referendum fears weighing on company orders and investment | Business | The Guardian

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