09 November 2021

FT: Close to half of UK’s FTSE 350 ‘damaged’ by Brexit

Almost half of FTSE 350 companies described post-Brexit trading arrangements with the EU as “damaging” but nearly all remained optimistic about their own prospects and the wider economic outlook, according to an analysis backed by the Financial Times.

Other issues raised by respondents to the latest FTSE 350 Boardroom Bellwether survey included challenges on executive hiring due to pandemic-related pressure to restrain pay and slow progress in adopting net zero carbon strategies. Twice as many FTSE 250 companies felt that there had been some damage from Brexit compared to those in the FTSE 100, showing that the impact has been felt most keenly by more domestically focused smaller businesses rather than the large international groups that typically occupy the top tier of the stock market.

The impact of the new UK-EU trading relationship highlighted the importance of unrestricted global trade and free movement of labour for many businesses. “Companies have been affected in a number of ways,” said Peter Swabey, policy director at the Chartered Governance Institute, which carried out the survey with the FT of company secretaries’ views. He pointed to “increased costs of materials, delays on lead times, additional procedural requirements, haulage issues, delays at [ports] and restrictions on freedom of movement.”

Nevertheless, nearly all respondents predicted there would be a significant improvement to global economic conditions over the next 12 months, despite continued uncertainty about the coronavirus pandemic. About four in five were positive on the UK economy as well as their specific industry’s prospects. More than half said that they would increase capital expenditure, up from 43 per cent in the last survey conducted in 2019 before it was put on hold last year because of the pandemic, while only 6 per cent anticipated a reduction....

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