Business leaders want to ‘remain’ but will they bother to vote?

BUSINESS leaders across the North West are so confident of a “remain” outcome to the EU Referendum there is a possibility of complacency and a Brexit win.

This is according to top economists and the regional head of UBS Wealth Management, based in Manchester.

Like many financial organisations, senior figures at UBS have been analysing polling data allied to economic trends as companies grapple with the various connotations.

Karan Sejpal, regional head of UBS Wealth Management in the North West said: “Locally it’s surprising how the client sentiment has changed, compared to the early part of the referendum campaign.

“Clients are becoming very confident, almost complacent about the possibility of us remaining in the EU.”

Sejpal said one key factor was the recent visit to the UK by US President Barack Obama when he made a strong case for Britain remaining in the EU.

“I think the Obama visit was a watershed moment,” said Sejpal. “When he said that the UK could be at the back of the line (on a trade deal) and it could take 10 years to strike one, I think it struck a chord.”

Dean Turner, director UK economist macro strategist for UBS nationally, echoed his thoughts.

“That comes through in the opinion polls,” he said. “If you look down through the polls, when asked what’s the most important factor in determining your vote – is it going to be economic wellbeing or other issues like immigration or whatever?

“Overwhelmingly, it’s the economy. It’s still the most dominant factor according to the polls.”

Bill O’Neill, head of Investment Office UK, for UBS Wealth Management, said that even people in the Brexit camp believed the remain lobby was going to win the referendum.

“When people who say they are going to vote leave are asked what do you think the result will be, overwhelmingly, they think the outcome will be for a remain vote,” he said.

“That may offer a true reflection of their intention of what they’re going to do once they get inside the polling booth.”

Turner added: “The danger for the remain camp is that people will think they don’t need to vote.”

Meanwhile, a pause on investment and hiring decisions in the run-up to the EU referendum has left the North West economy on hold, according to the latest Business Trends Report by accountants and business advisers BDO.

This month’s report reveals that the uncertainty ahead of the decision about our EU membership has cast a shadow over the regional economy, leaving business investment weak and growth expectations amongst UK corporates falling for the tenth month in a row.
 
BDO’s Output Index – which reflects companies’ experience of orders on hand – now sits at 99.7. This is the first time since 2013 that it has fallen below the 100 level that indicates the long-term trend growth at about 2%.
 
The uncertainty around the EU decision is also contributing to a slowdown in job creation. BDO’s Employment Index – which shows firms’ intentions to hire – has dropped to 101.2.

Parenter Ed Dwan said: “Private sector capital investment has been sluggish throughout this recovery, and recent official figures show sharp falls – no doubt related to Brexit fears.

“This fall has no doubt contributed to the region’s businesses’ expectation that economic growth will fall behind its long term trend for the first time in nearly three years.
 
“In the end, investment drives productive capacity, growth and living standards. After the referendum, we must see businesses starting to invest or we face a worrying future.”