35% of UK SMEs resigned to a 'hard Brexit'

More than a third of UK SMEs (35%) are resigned to a 'hard Brexit', according to Bibby Financial Services.

The business funder’s SME confidence tracker has reported a fall in confidence following prolonged negotiations between the UK and the European Union. 

The survey found that just 20% of SMEs expected Brexit to be achieved by March 2019.

The vast majority of SMEs (71%) were clear that Brexit would happen, with 51% anticipating a transitional phase before the UK can leave the European Union.

However, SMEs were split over what Brexit would look like, with 36% anticipating a ‘soft Brexit’ and 35% expecting a ‘hard Brexit’. 

“Uncertainty isn’t good for business and Brexit is uncertainty in its most acute form,” said Edward Winterton, UK CEO of Bibby Financial Services.

“One thing the SME community is certain about is that we are leaving the EU. 

“What is less clear is what Brexit will look like.”

The research also found that:

nearly one in 10 (8%) thought it would be a soft Brexit and would be achieved by March 2019
over one in 10 (12%) thought it would be a hard Brexit and would be achieved by March 2019
over a quarter (28%) thought it would be a soft Brexit, but after a transitional phase
nearly a quarter (23%) thought it would be a hard Brexit but after a transitional phase
nearly one in 10 (8%) didn’t think Brexit would go ahead at all.

“Since the vote, we have seen a decline in business confidence and we are now starting to see foreign exchange fluctuations making it much more costly to import goods and services,” added Edward. 

“Add to this declining domestic sales, and it reveals how tough it is in the current climate for the ‘backbone of Britain’.” 

Figures also revealed that 26% of SMEs felt that an uncertain economic environment in the UK was holding back investment, with other barriers including rising costs, declining sales, building up company’s cash reserves and uncertainty arising from the exit from the EU.

“Investment decisions are being delayed, which will have further impacts on the economy,” continued Edward.

“However, our latest findings reveal that although business confidence continues to decline, Britain’s businesses are still ambitious. 

“The majority (60%) plan to expand their business in the UK over the next 12 months. 

“A little certainty would, therefore, go a long way right now. 

“The government knows what it needs to do. 

“And the clock is ticking.”

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