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Equilibrium's Finance and Investment News Roundup

As the fallout from Brexit continues, our roundup this week includes new survey results suggesting confidence among UK businesses has dropped following the vote to leave, Standard Life suspending trading in its UK property fund and a second consecutive day of falls for the FTSE, as well as claims that pension schemes will require a delicate balancing act in the aftermath of the referendum.

 

Survey: Confidence among UK businesses falls after EU vote

Pessimism has grown among UK businesses in the aftermath of Britain's vote to leave the European Union (EU). This is according to a new survey conducted by YouGov and the Centre for Economics and Business Research (Cebr), which revealed the number of businesses feeling pessimistic about the economy over the next year increased from 25% before the vote to 49% after it.

Scott Corfe, Director at Cebr, said the results of the survey, which polled 1,000 British-based companies, suggests a shock reaction to Brexit.

He said: "Not only are businesses feeling much more pessimistic in general about the state of the economy, but their own expectations for domestic sales, exports and investments over the next 12 months have gone off a cliff."  

Standard Life suspends UK property fund trading post-Brexit

Standard Life Investments has announced it has suspended trading in its UK property fund following the EU referendum. The fund, which invests in commercial real estate in the UK, including shopping centres and office blocks, is worth £2.9 billion.

The fund manager explained the decision has been taken due to the "exceptional circumstances" surrounding the result of the vote, with an increasing number of investors eager to withdraw their money following Britain's decision to leave the bloc.

In a statement, it was explained that the step was taken to "protect the interests of all investors in the fund". The suspension is to be reviewed every 28 days and it is Standard Life's intention to end it "as soon as practicable". 

FTSE falls for second consecutive day on Tuesday

The FTSE dropped for the second consecutive day on Tuesday and was down 0.6% in early morning trading. The fall came after Standard Life's suspended trading in its real estate fund and due to worries among housebuilders following Brexit.

Standard Life Investments' Property Income Trust tumbled more than 14% to sit at its lowest point since 2013, while pessimism among housebuilders resulted in drops of more than 5% for Barratt Development, Berkeley Group, Taylor Wimpey and Persimmon. Immediately following Brexit, the market value of top British householders reduced by around £8 billion, before recovering slightly and then falling again. 

Pension schemes 'require delicate balancing act'

Maintaining the strength of pension schemes amid the fallout from Brexit will require a delicate balancing act, it has been claimed. Pensions Minister Ros Altmann explained that while there is a requirement for some companies to keep the deficits of their final salary pension schemes under control, they should not have to spend too much to make up these gaps, especially at a time when the UK economy is in need of a boost.

Speaking on BBC Radio 4's Money Box, Ms Altmann said: "What we don't want to do is offset some of the stimulus that we want to give to the economy by forcing companies to put too much money into their pensions in the near-term if they can't afford it."