Eurozone crisis biggest worry for UK firms
Economic problems in the Eurozone tops the list of biggest concerns for British businesses, a poll by the British Chambers of Commerce (BCC) has found.
Over half of UK firms (52 per cent) said ongoing uncertainty within the Eurozone will ‘significantly impact’ their business this year and in 2013.
Government cuts to the public sector were also a cause for concern for 46 per cent of businesses, followed by access to finance (42 per cent).
The poll of 2,000 businesses came shortly before yesterday’s announcement by the Bank of England (BoE) which slashed the UK’s economic growth forecast for 2012 to almost zero per cent.
The Bank’s governor Mervyn King said that the recession in the euro area was ‘damaging demand for exports’ and causing ‘uncertainty for investment.’
Instability in the Eurozone would continue to cause uncertainty and unpredictable recovery rates in the future, he warned.
The EU remains the most popular market for UK exporters, with 78 per cent of firms believing it is easy to trade with the EU’s 27 member states. However, the figure has only a small lead on other countries as far away the USA and Canada, with 62 per cent saying it is easy to trade with them. This was closely followed by Australia and New Zealand (60 per cent).
Over a third (25 per cent) of businesses told the BCC that EU regulatory burdens imposed on them were outweighing the benefits of being in a single market.
Director general of the BCC John Longworth, said: ‘British firms seem to feel that the balance of advantage of EU membership is lessening.’
He said more needed to be done to make the Single Market work better for businesses looking to export.
“This includes the creation of a digital single market, making a reality of the internal market for energy, and deepening the single market in services.”
A previous study by the BCC found that eight in ten British businesses did not want further integration with the EU, with 12 per cent of firms wanting to leave EU altogether.
“The UK government must help to deliver a Single Market that works, and make efforts to stem the tide of regulation from Brussels that prevent business from growing,” Longworth added.