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Spotlight: Business confidence plunges after Brexit vote

Xinhua, July 5, 2016 Adjust font size:

Confidence among British businesses plunged following the country's historic vote to leave the European Union, a survey showed on Tuesday, worsening a bleak economic outlook.

Among the 1,000 British-based companies surveyed, almost half were downbeat about the British economy over the next 12 months, doubling the figure prior to the June 23 referendum, according to the YouGov/Center for Economics and Business Research (Cebr) survey.

Moreover, their own expectations for domestic sales, exports and investments over the next 12 months have gone off a cliff, Scott Corfe,director of Cebr, noted.

The pessimism increased amid a mess prompted by the British vote to quit the EU. That includes a sharp devaluation of the pound sterling, the EU urge for an immediate start of Brexit talks, as well as political uncertainties about a new leadership scheduled for October following the resignation of Prime Minister David Cameron.

While Britain's central bank has indicated a likelihood to provide more economic stimulus this summer, Chancellor of the Exchequer George Osborne has partly pinned the hope for Britain's post-vote economy on Chinese investment.

In his first media interview after the Brexit vote, Osborne told the Financial Times newspaper on Monday that he will seek more bilateral trade deals and continued inflows of Chinese investment, among the priorities to spur Britain's economic growth.

He is expected to visit Beijing later this year to make those happen.

In his earlier economic stimulus plans, Britain's company tax is to be further reduced from the current 20 percent, to below 15 percent, a level lower than in most major economies.

London needs to show investors urgently that Britain's business environment is as open as before, said the chief of the British Treasury, who had warned against a technical downturn for the British economy over two seasons following the Brexit vote.

Support for bank lending, increased input in the development of the North of England as well as sustained financial credit, are also top on Osborne's economic agenda aimed at making Britain competitive.

However, a new government ahead has cast doubt on the prospects of Osborne's ambitious project. Endi