Business Urges 'Shot In The Arm' After Brexit

Business groups have urged the Government to end the uncertainty facing EU nationals living in the UK and to push ahead with key infrastructure projects, following the European referendum.

The open letter from the British Chambers of Commerce, the CBI, the Federation of Small Businesses, the Institute of Directors and the manufacturers' organisation EEF, said addressing these issues would be "a shot in the arm for business confidence".

It (Other OTC: ITGL - news) comes as a separate survey from YouGov (LSE: YOU.L - news) and the Centre for Economics and Business Research (Cebr) showed that confidence among British businesses had fallen sharply after the vote.

The letter called for the Government "to provide clear leadership and immediate action on two fronts" as they face up to the "opportunities and challenges" they face after the referendum result.

It asked for measures to end abuse against EU nationals living in the UK and a "clear and unequivocal reaffirmation" of their residence rights "both because it is the fair thing to do and because their skills are crucial to the success of our businesses".

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The business groups also demanded that the postponement on a decision on airport expansion after the poll "must not set the tone for other critical housing, road, rail, energy and digital schemes", saying these investments were vital given their impact on jobs, regional growth and prosperity.

"Addressing these key issues would be a shot in the arm for business confidence, and send the right signals across the world," the letter said.

"This may be a time for calm reflection, but it is not a time for inaction."

It comes as the Cebr poll showed the number of businesses pessimistic about the economy over the next 12 months jumped to 49% in the week following the referendum from 25% before the vote outcome.

"These figures... suggest a significant shock reaction (to Brexit)," Scott Corfe, director at Cebr said.

"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."

Britain's vote to withdraw from the 28-nation club has prompted political chaos, a sharp drop in sterling and clouded the economic outlook. Bank of England Governor Mark Carney has said it would be likely need to provide more stimulus to the economy - which could mean interest rate cuts over the summer.