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Economy in limbo over EU exit vote

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The upcoming referendum on EU membership is casting a shadow over the UK economy.

New research by accountants BDO found that business output and optimism fell in May.

Firms reported that uncertainty over the outcome of the Brexit vote later this month was impacting on their operations, a trend being seen across the UK.

The jobs market has also been impacted with fewer new opportunities being brought forward.

“Uncertainty – both about the EU referendum but also wider economic concerns – has contributed to businesses’ expectation that economic growth will fall behind its long term trend for the first time in nearly three years,” BDO Scotland head Martin Gill said:

“There have been reports of subdued activity in the construction sector, in manufacturing, and obviously in the oil and gas sector.

“ These are three very important contributors to the Scottish and wider UK economy and all three reporting reduced activity is a concern.”

He added: “We need to see greater investment and higher productivity to improve capacity, encourage growth and ultimately drive up living standards.

“If businesses don’t foresee growth and a more optimistic outlook in the next few months then we could be in for a bumpy ride this autumn.”