LONDON (Reuters) - British companies perked up after a weak start to the year but they are still reluctant to invest ahead of Brexit and pessimism is widespread, a major business survey showed on Monday.
The British Chambers of Commerce’s (BCC) Quarterly Economic Survey, the largest of its type, showed Britain’s economy remained fairly muted overall.
The industry group questioned the need for higher interest rates from the Bank of England, after comments from Governor Mark Carney last week boosted expectations of a rate hike in August.
While services and manufacturing companies enjoyed faster domestic sales in the second quarter, investment intentions faded slightly.
Overall, the BCC report chimed with similar surveys from Lloyds Bank and Deloitte that showed businesses in a cautious mood ahead of Britain’s departure from the European Union, with rising oil prices and global trade disputes also weighing.
Britain will leave the European Union in March 2019 but a transitional trade agreement has still to be finalised.
Last month, multinational companies Airbus (AIR.PA) and Siemens (SIEGn.DE) warned their investments in Britain could be at risk if Britain leaves the EU without a deal. They directly employ about 30,000 people in Britain.
“While the modest pick-up in domestic activity points to a slight rebound in growth from a weak first quarter, there remains little evidence in the current data to suggest a sustained upturn in the UK’s economic growth prospects,” BCC head of economics Suren Thiru said.
“Against this backdrop, the Bank of England’s recent rhetoric around raising interest rates continues to look ill-judged.”
The BCC surveyed 6,037 businesses between May 21 and June 11.
Reporting by Andy Bruce; Editing by Catherine Evans