UK firms delay deals ahead of EU referendum

According to British survey, big British firms mostly are delaying deals or hiring decisions ahead of EU vote

Photo by: Reuters (Archive)
Photo by: Reuters (Archive)

A British Union flag and an European Union flag are seen flying above offices in London.

A British survey showed on Monday, big British firms mostly are delaying deals or hiring the decisions ahead of the referendum that will determine the country’s European Union membership.

The survey also revealed that the economy is the most substantial element that will effect the decisions on referendum.

Chief financial officers are increasingly in favour of staying in the EU, according to the survey of chief financial officers published by accountancy firm Deloitte.

The survey showed that 75 percent of the chief financial officers from FTSE 350 and also other large private companies want to keep EU membership of Britain.

But the survey also showed 83 percent of CFOs thought the level of uncertainty facing their business was above normal, high or very high, a big jump from 64 percent at the end of 2015 and the highest level in over three years.

"The referendum appears to be already contributing to a slowdown," David Sproul, chief executive of Deloitte, said. "We have seen a marked slowdown in M&A activity as businesses put plans on hold for now."

Plans for hiring and capital spending had also decreased, Deloitte said.

Moreover, the Vote Leave group said on March, 27 that the campaign for Britain to leave the EU has been backed by 250 business leaders including the former chief executive of HSBC, hoping to counter the view that UK businesses back staying in the bloc.

The camps argued for and against Britain staying in the European Union ahead of a referendum on British membership on June 23 have both made the economic impact of a 'Brexit' a cornerstone of their campaigns.

German Finance Minister Wolfgang Schaeuble said on March, 3 at a business conference in London that the European Union would be less stable and less competitive if the United Kingdom decides to leave the organisation.

"If the UK would not be engaged (in) the European Union as a member, I think the UK would take the risk that continental Europe would be a little bit less stable, more volatile and that is not in Britain's interests," Schaeuble said, speaking in English.

The UK will have an in-or-out referendum on EU membership on June 23.

TRTWorld and agencies