The “persistent uncertainty” of Brexit is negatively affecting companies’ performance in Britain, according to a paper on the impact of Brexit on firms in the U.K. from NBER.
More than 45% of U.K. firms surveyed said Brexit has been a key driver of uncertainty since September 2018. Since the June 2016 referendum, researchers have observed a negative relationship between the level of firms’ uncertainty (rising) and employee productivity (falling). Investment by firms has dropped 11%, and productivity has fallen by as much as 5% at some firms.
This uncertainty is reflected in the time executives spend on the topic: “Ten percent of chief financial officers and 6% of chief executive officers were spending at least six hours a week on how to cope with Brexit.”