Rising Brexit uncertainty has reduced investment and employment

Research co-written by the School of Economics' Professor Paul Mizen has used the Decision Maker Panel (DMP) to assess how much uncertainty there is due to Brexit and the effects that this is having on UK businesses. It shows that Brexit uncertainty has been high and rising in September and October 2018, investment and employment growth over the past two years has fallen, and future productivity is expected to be lower because more productive firms are more uncertain than less productive ones.

This research featured in The Financial Times on 12 November 2018 and appeared in the VoxEU website gaining more than 6,000 reads in the first week. It was cited in evidence to the Treasury Select Committee in Parliament on 20 November by Bank of England, Chief Economist Andy Haldane who said: "there is already some signs in the past month or two of uncertainties around a cliff edge…as we get nearer to the point of withdrawal that has had a more material impact on the investment plans of business. Brexit uncertainty is the single largest headwind identified in our latest survey conducted in September and October."

The full report was published on VoxEU website and evidence to Parliament.

The DMP, based at the University of Nottingham, is a collaboration between the School of Economics, University of Nottingham, the Bank of England and Stanford University. Since launching in 2016, it has surveyed around 3,000 UK Chief Financial Officers (from a sample that has grown to over 7,000 firms) to provide direct insight into business expectations and subjective uncertainty about sales, investment, employment, costs and prices.