Davos 2017: UK bosses optimistic despite Brexit fears

Media captionThe Davos summit… in numbers

UK bosses are more optimistic about their firms’ prospects than a year ago, despite fears the Brexit vote could hamper growth, a survey suggests.

Some 89% of UK chief executives are confident their firm will grow this year, up from 85% last year, the poll by consultants PwC showed.

The finding makes UK business leaders some of the most optimistic globally.

But they are gloomy about the wider economy, with just 17% expecting global growth to improve this year.

PwC’s survey, released ahead of the annual World Economic Forum, held in the Swiss Alpine village of Davos, interviewed more than 1,300 chief executives in 79 countries, including 126 UK bosses.

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“There are signs of optimism right across the globe, including in the UK and US, where despite predictions of a Trump slump and a Brexit exit, CEOs’ confidence in their company’s growth are up from 2016,” said PwC’s global chairman Bob Moritz.

Pound drop

British bosses’ confidence is not just short term, the survey indicates. Almost all of those polled expected their firms to grow over the next three years, again making them more bullish than their global peers.

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Theresa May is due to give a speech on her Brexit plans on Tuesday

Almost two-thirds of UK firms also expect to hire new staff this year, higher than the global average, and vastly outweighing the minority that expect to cut jobs.

The apparent optimism comes despite Prime Minister Theresa May’s pledge to trigger Article 50 – the process of leaving the EU – by the end of March.

However, the survey indicated firms were concerned about the most evident impact of the Brexit vote so far – the sharp fall in the pound.

The pound has fallen around 20% against the dollar since the referendum.

Reports that Mrs May could be willing to sacrifice the UK’s membership of the single market and customs union in order to gain control over migration led to a renewed slide in sterling overnight.

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But questions over the impact of the UK’s EU exit do not appear to have deterred the UK’s popularity as a place to invest, with its attractiveness to foreign firms increasing since last year.

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Getty Images

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The majority of firms surveyed said they were concerned about protectionism and the election of Donald Trump

Overall, the UK is seen as the fourth most important country for growth, behind the US, China and Germany.

The optimism of British bosses reflects a broader increase in confidence globally among leaders, although levels are still far from the pre-financial crisis heights in 2007.

Bridge the gap

The survey also shows firms are concerned about the impact of some of Donald Trump’s expected policies.

During his election campaign, Mr Trump threatened to rip up Nafta, the free trade agreement between Canada, the US and Mexico, which has been in place for 23 years.

The majority of those polled said they were concerned about protectionism, but US and Mexican bosses were particularly worried.

Despite most bosses globally believing that the free movement of trade and people was positive, they also acknowledged it had not helped improve inequality between rich and poor.

Mr Moritz called on firms to help bridge the gap.

“There’s a lot at stake if we do not achieve inclusive global growth,” he said.

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