Business
UK BUSINESS CONFIDENCE STEADY DESPITE BREXIT FEARS, FINDS MAJOR ACCA SURVEY
Published by Gbaf News
Posted on October 22, 2016
7 min readLast updated: January 22, 2026
Global Banking & Finance Review®
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Published by Gbaf News
Posted on October 22, 2016
7 min readLast updated: January 22, 2026
Fears that headwinds from the UK vote to leave the EU in June could spread to the global economy have not been realised, with confidence amongst UK businesses holding up relative to the previous quarter according to the latest the latest Global Economic Conditions Survey published today by ACCA (the Association of Chartered Certified Accountants) and IMA (Institute of Management Accountants).
Global business confidence is at its highest in twelve-months, with OECD countries anticipating a rise in government spending, a four-year confidence high in China leading to an uplift in emerging markets and the US continuing a stable recovery.
With protectionist sentiments on the rise across many nations, the US presidential elections in November could have a significant impact on whether this improving confidence translates into genuine increases in employment and investment.
Faye Chua, head of business insights at ACCA, points out that despite the UK vote to leave the European Union, business confidence has so far held steady,
‘In the UK, confidence has held up in the wake of gloomy predictions – this may be partly linked to greater willingness from the incoming administration to loosen the purse strings (despite a high budget deficit) and rate reductions from the Bank of England to pre-empt a slowdown.
Yet we must remember that, despite perceptions, the process of Brexit has not begun yet and that overall the UK represents only 4% of global trade GDP. Nearly 60% of global respondents said that they had not been affected by the vote.’
Faye Chua says that the survey highlights the importance of governments supporting growth and their increasing realisation of the limits of monetary policy,
‘Over 51 per cent of global respondents expected government spending to rise, which has driven global business confidence to the highest point in over a year. After years of reduced investments in most Western economies, a combination of falling budget deficits and bond yields is encouraging governments to reach for their wallets. This is good news for business in a continued depressed climate for investment and hiring.
Yet Faye Chua says that despite improvements in confidence, the world is yet to see it translate into a meaningful boost to hiring and investment,
Only 19 per cent of firms said they are considering hiring new staff, and only 14 per cent said they are looking at opportunities to invest in new technology. In every region, there were more businesses planning to cut staff than those planning to hire more.
Faye Chua argues there could be bigger challenges ahead for the global economy in the next quarter,
The World Trade Organisation is reporting record levels of trade restrictions between nations, and there has been a pronounced protectionist turn in the US presidential elections with regard to trade.
The outcome and response to that election, together with the prospect of Brexit negotiations drawing closer, will provide a test of this fragile confidence
The Global Economic Conditions Survey (GECS), carried out jointly by ACCA (the Association of Chartered Certified Accountants) and IMA (the Institute of Management Accountants), is the largest regular economic survey of accountants around the world, in terms of both the number of respondents and the range of economic variables it monitors. Its main indices are good predictors of GDP growth in themed countries and its daily trend deviations correlate well with the VIX or ‘fear’ index, which measures expected stock price volatility.
Fieldwork for the Q3 2016 GECS took place between 2nd and 19th Sept 2016, and attracted 1,512 responses from ACCA and IMA members around the world, including more than 150 CFOs.
The report can be viewed here: http://www.accaglobal.com/uk/en/technical-activities/technical-resources-search/2016/october/gecs-q3-2016.html
Fears that headwinds from the UK vote to leave the EU in June could spread to the global economy have not been realised, with confidence amongst UK businesses holding up relative to the previous quarter according to the latest the latest Global Economic Conditions Survey published today by ACCA (the Association of Chartered Certified Accountants) and IMA (Institute of Management Accountants).
Global business confidence is at its highest in twelve-months, with OECD countries anticipating a rise in government spending, a four-year confidence high in China leading to an uplift in emerging markets and the US continuing a stable recovery.
With protectionist sentiments on the rise across many nations, the US presidential elections in November could have a significant impact on whether this improving confidence translates into genuine increases in employment and investment.
Faye Chua, head of business insights at ACCA, points out that despite the UK vote to leave the European Union, business confidence has so far held steady,
‘In the UK, confidence has held up in the wake of gloomy predictions – this may be partly linked to greater willingness from the incoming administration to loosen the purse strings (despite a high budget deficit) and rate reductions from the Bank of England to pre-empt a slowdown.
Yet we must remember that, despite perceptions, the process of Brexit has not begun yet and that overall the UK represents only 4% of global trade GDP. Nearly 60% of global respondents said that they had not been affected by the vote.’
Faye Chua says that the survey highlights the importance of governments supporting growth and their increasing realisation of the limits of monetary policy,
‘Over 51 per cent of global respondents expected government spending to rise, which has driven global business confidence to the highest point in over a year. After years of reduced investments in most Western economies, a combination of falling budget deficits and bond yields is encouraging governments to reach for their wallets. This is good news for business in a continued depressed climate for investment and hiring.
Yet Faye Chua says that despite improvements in confidence, the world is yet to see it translate into a meaningful boost to hiring and investment,
Only 19 per cent of firms said they are considering hiring new staff, and only 14 per cent said they are looking at opportunities to invest in new technology. In every region, there were more businesses planning to cut staff than those planning to hire more.
Faye Chua argues there could be bigger challenges ahead for the global economy in the next quarter,
The World Trade Organisation is reporting record levels of trade restrictions between nations, and there has been a pronounced protectionist turn in the US presidential elections with regard to trade.
The outcome and response to that election, together with the prospect of Brexit negotiations drawing closer, will provide a test of this fragile confidence
The Global Economic Conditions Survey (GECS), carried out jointly by ACCA (the Association of Chartered Certified Accountants) and IMA (the Institute of Management Accountants), is the largest regular economic survey of accountants around the world, in terms of both the number of respondents and the range of economic variables it monitors. Its main indices are good predictors of GDP growth in themed countries and its daily trend deviations correlate well with the VIX or ‘fear’ index, which measures expected stock price volatility.
Fieldwork for the Q3 2016 GECS took place between 2nd and 19th Sept 2016, and attracted 1,512 responses from ACCA and IMA members around the world, including more than 150 CFOs.
The report can be viewed here: http://www.accaglobal.com/uk/en/technical-activities/technical-resources-search/2016/october/gecs-q3-2016.html
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