British businesses are not hedging their bets at the moment, they are definitely expecting at least six months of turmoil before a “new normal” is established in the UK economy.
This is according to Begbies Traynor’s Red Flag Alert research for the second quarter (Q2) of 2016, which monitors the financial health of UK companies.
On a positive note, this found that, in the three months preceding the EU referendum, levels of “significant” financial distress among UK businesses fell for the first time since Q3 2015.
However, Begbies Traynor warns that over the next six months at least, any positive improvements seen since April are likely to be reversed following the immediate negative impact that the Brexit result had on British businesses.
The Property and Construction sectors are expected to bear the brunt of Brexit, it said, with nearly 50,000 firms at risk.
Ric Traynor, Executive Chairman at Begbies Traynor said: “Although more than half the country voted for a Brexit, the result has undoubtedly caused a spike in uncertainty while raising concerns over job security, contributing to weaker consumer confidence and the deferral of investment plans, all of which is likely to impact spending and business growth in the short term.”
The process of exiting the EU, while at the same time agreeing new trade agreements, is likely to be a long and drawn-out affair, he concluded, so businesses should prepare themselves for the long haul.