Bank of England

Wednesday, September 20, 2017 - 05:19

BOE CFO Survey: Brexit A Downside Risk But Firms Staying Put

--Decision Maker Panel Survey: Companies See Slower Sales Growth Ahead

LONDON (MNI) - A Bank of England survey of UK Chief Financial Officers found that while they expected softer sales growth in the year ahead and saw Brexit on balance as a downside risk, the vast majority of firms were not planning to shift any part of their business abroad.

The BOE Decision Maker Panel (DMP) survey found that the CFOs expected nominal sales growth, on average, to decline from 7.6% in the year through Q2 2017 to 5.3% over the coming year. Employment growth was also expected to soften, but few firms are planning to leave the UK.

In all, CFOs accounting for 7% of total employment said that there was a greater than 50% chance that at least part of their operations would move abroad.

The survey did, however, add to the evidence that those firms that are planning to move abroad are not likely to hang around to see exactly how Brexit pans out. Of those firms attaching a greater than 75% chance to moving some business abroad, 87% said that they would move within two years.

The BOE DMP survey was published alongside the monthly BOE Agents' Business Conditions report.

The agents survey for third quarter found that investment intentions were signalling weaker growth in the services sector, with signs of slowing in the construction sector.

Only growth in the manufacturing sector held steady, with exporters reporting above normal growth, as they benefit from stronger overseas economic growth and sterling weakness.

The long awaited rise in pay growth has yet to materialize, with pay settlements clustered in a 2 to 3% range despite recruitment difficulties remaining elevated.

--MNI London Bureau; tel: +44 203-586-2223; email:

[TOPICS: M$B$$$,M$E$$$,M$$BE$]

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