Economic confidence in a post-Brexit U.K. fell sharply in the second quarter of 2016, the latest YPO Global Pulse survey found, in the latest indication that the decision to leave the European Union has left firms concerned over what lies ahead.
However, shoppers do not appear to be sharing the same concerns: Latest figures from the British Retail Consortium (BRC) show sales in stores across the U.K. were up 1.1 percent year-on-year on a like-for-like basis in July.
The BRC noted promotions encouraged shoppers to spend and little had "materially changed" for shoppers in the wake of the Brexit vote.
"I think there is a wait–and-see attitude among retail shoppers and it will take a bit of time before people's behaviors are adjusted," Sam Abboud, Founding Partner, Pioneer Point Partners told CNBC.
Nonetheless, economic confidence experienced a steep drop from 62.9 in the first quarter of 2016 to 57.9 in the second, the YPO survey found. The Brexit vote also hit confidence in the European Union, where economic confidence declined 3.1 points in the second quarter.
The quarterly electronic survey, conducted in the first two weeks of July 2016, gathered answers from 2,389 chief executive officers across the globe, including 238 in the European Union.
"It's of little surprise that business confidence has taken a hit following the Brexit decision and mounting concerns about financial instability within many European economies. This uncertainty is likely to continue throughout the rest of this year, as negotiations on the terms of the United Kingdom's withdrawal from the EU get underway and fears persist about potential recession in several major economies," said Erik Lorenz Petersen, YPO European regional chair from Denmark, in a statement accompanying the survey.
"However, at 58.5, it should be noted that EU confidence remains relatively strong across the region, and the immediate economic impact of Brexit may not be as catastrophic as many business leaders feared in the days after the referendum. CEOs still believe there are opportunities for growth and success despite the current turbulence."
Confidence amongst chief executives and business leaders in the United Kingdom fell significantly as a result of the referendum decision. Half of CEOs said that current business conditions were worse than six months prior, and the same proportion (49 percent) expected conditions to deteriorate further over the next six months.
This was a far more pessimistic outlook than in the previous quarter's survey, when only 28 percent reported worse conditions than six months prior, and only 26 percent expected the economic landscape to deteriorate in the six months ahead, YPO said.
Separately, the U.K.'s Office for National Statistics (ONS) released data on Tuesday which showed that British industrial output grew in June ahead of the Brexit vote and surged in the second quarter as a whole.
Overall, the level of production in June was 1.6 percent higher than the level in June 2015 and 3.3 percent above its level in June 2014. Production output increased by 2.1 percent in the second quarter of 2016 following 2 quarters of contraction, raising the level of production output to its highest level since the fourth quarter of 2010, the ONS said.