Is The UK Economy Due For A Flood Of Cash Once The Brexit Fog Clears?

A wall of money could flow into the UK economy as soon as there is clarity on where we are heading as a country. UK businesses have significantly increased the amount of cash they are retaining. If the government can provide some much-needed clarity on what happens next, that pent up cash hitting the economy could lead to a spike in investment and growth in UK PLC.

That’s according to market analysts Plimsoll. Having analysed 1600 different sections of the UK economy, Plimsoll have seen a 27% increase in the amount of cash companies are sitting on. Where in the previous financial year companies were retaining 13% of the sales as cash, this figure has ballooned to 17%.

Here are the industries with the biggest increase in cash reserves that will be at the forefront of any investment bonanza:

Christopher Evans, Senior Analyst at Plimsoll said, “Without mentioning the ‘B’ word, companies appear to have held off on investment because of a lack of clarity. That’s not Project Fear. It’s not a case of might be or maybe. It’s a fact. In their latest year, companies have retained 27% more of their sales as cash on their balance sheets. That’s money sat in the bank rather than creating jobs, investing in innovation or growth”.

“Is it any wonder that we as an economy are lagging behind the rest of the G20 when so much spare cash is sitting waiting for a rainy day? A lack of a clearly defined near term strategy and clarity about what next for UK PLC has certainly slowed down investment resulting in a lost couple of years for our economy”.

“It is now up to the UK Government to provide the clarity UK companies so desperately need. Once they’ve provided a clear vision that business can get behind, we can expect a spike in investment and growth as companies look to spend the cash they have sat on over the past year or two”.

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