As Remainers have said all along, Brexit will be bad, very bad for British business, and data now proves this will indeed be the case.
In a grim forecast, the British Chambers of Commerce (BCC) said British companies will slash investments by the most in 10 years in 2019 because of Brexit, deal or no deal. It said the business investment was forecast to fall by an annual 1.0 percent in 2019 on account of meager investments by companies.
This investment slows down has a negative effect on productivity which, in turn, crimps wage increases and slows the overall British economy.
"Political inaction has already had economic consequences, with many firms hitting the brakes on investment and recruitment decisions," said Adam Marshall, BCC director general.
"Worse still, some companies have moved investment and growth plans (overseas) as part of their contingency preparations. Some of this investment may never come back to the UK."
BCC ruefully noted some financial firms have set up operations in other countries that are members of the European Union while carmakers such as Honda have reduced their expansion plans in the United Kingdom. BMW said recently said it might move some of its production overseas in the event of a no-deal Brexit, which is now the likeliest course of action for the embattled government of Prime Minister Theresa May.
BCC said the business investment is expected to grow by a paltry 0.6 percent in 2020 and 1.1 percent in 2021. It lowered its overall growth forecast for Britain's economy to 1.2 percent in 2019 from the previous 1.3 percent estimate.
This estimate, which jibes with that of the Bank of England, will be the economy's weakest growth in a decade. The major drivers of this slowdown are the palpable weakening of the global economy and, of course, Brexit.
The BCC saw only a weak economic recovery, with GDP growth inching-up to 1.3 percent in 2020 and 1.4 percent in 2021. It said its forecasts assume the UK will avoid a disorderly exit from the EU.
"A messy and disorderly exit from the EU would do real and lasting damage to the UK's economic prospects," said Marshall.
On the other hand, Chancellor of the Exchequer Philip Hammond said he expects an improvement in investment by companies once a Brexit deal is done.
The BCC disagrees with Hammond and contends any quick investment rebound will be curtailed by the diversion of resources to prepare for the risk of a no-deal Brexit; the massive up-front costs of doing business in Britain, and questions over Britain's future ties to the EU.
Government data shows that business investment fell in each of the four calendar quarters in 2018, which is the longest such retreat since the Great Recession of 2008.
