Mark Sismey-Durrant, CEO at Hampshire Trust Bank, stated in reports yesterday that the UK’s small to medium enterprises (SMEs) are stockpiling cash of more than £230,000 on average in current accounts, in order to mitigate risks from a volatile economy, should the UK decide to leave the EU in a “Brexit.” The report also states that, as part of its contingency planning, SMEs have been advised by banks and financial institutions to increase their capital levels for the next 12 months. James Knightley, Senior Economist at ING, warned that the UK could face two years of uncertainty anyway, which may lead to a reduction in foreign investors, downward pressure on sterling, and a cautious approach by the Bank of England to raising interest rates. UK GDP growth in 2017 could also be half a point down, whilst the impact on businesses is hard to quantify at the moment. On the other hand, if the UK negotiates a stronger deal with the EU and stays in, growth of 3.5%+ in 2018 is a possibility, Mr Knightley has suggested.
Mark Sismey-Durrant, CEO at Hampshire Trust Bank, stated in reports yesterday that the UK’s small to medium enterprises (SMEs) are stockpiling cash of more than £230,000 on average in current accounts, in order to mitigate risks from a volatile economy, should the UK decide to leave the EU in a “Brexit.” By the end of 2017, Britons will cast their votes on whether the UK should remain a part of the EU or separate from it. James Knightley, Senior Economist at ING, warned that the UK could face two years of uncertainty anyway, which may lead to a reduction in foreign investors, downward pressure on sterling, and a cautious approach by the Bank of England to raising interest rates. UK GDP growth in 2017 could also be half a point down, whilst the impact on businesses is hard to quantify at the moment. On the other hand, if the UK negotiates a stronger deal with the EU and stays in, growth of 3.5%+ in 2018 is a possibility, Mr Knightley has suggested.