The Guardian - 30.08.2019

Section:GDN 1N PaGe:41 Edition Date:190830 Edition:01 Zone: Sent at 29/8/2019 20:47 cYanmaGentaYellowb

Friday 30 Aug ust 2019 The Guardian •

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Freeze on spending and hiring shows

Brexit chaos has already hit business

Sean Farrell

Clear signs that Brexit chaos is starting

to bite emerged as businesses fl agged

a freeze on spending and delays in

hiring workers amid plunging confi -

dence over the prospect of leaving the

EU without a deal.

Two major UK companies warned

that economic uncertainty was

prompting business customers to sit

on their cash instead of making invest-

ments to support growth and jobs.

Micro Focus, the FTSE 100 IT ser-

vices company, said revenue would be

lower than expected this year because

business customers were putting off

spending due to the uncertain outlook.

The company said business had dete-

riorated since early July.

In a trading update the Berk-

shire-based fi rm said: “Weak sales

execution has been compounded by

a deteriorating macro environment

resulting in more conservatism and

longer decision-making cycles within

our customer base.” Shares fell by

almost a third.

In a further sign of businesses tight-

ening their belts Hays, Britain’s biggest

recruitment company, said trading in

the UK had slowed in the past few

weeks as Brexit uncertainty damaged

confi dence among its business clients.

Hays’s chief executive, Alistair Cox,

said: “In the UK I would say all of the

subdued sentiment is in some way

related to the Brexit process and the

time it’s taking. ”

Business investment in factories,

machinery and technology has fallen

in the UK as companies have diverted

money to Brexit preparations and have

shelved spending on projects over the

threat of a chaotic exit from the EU.

The Confederation of British Indus-

try has predicted the threat of no-deal

will cause the biggest drop in business

investment since the fi nancial crisis ,

and companies’ failure to spend con-

tributed to the fi rst contraction in

economic output for almost seven

years in the second quarter of 2019.

The two companies issued their

warnings as fi gures from the Euro-

pean commission showed a sharp fall

in British economic confi dence to its

lowest since early 2012.

Suren Thiru , head of economics at

the British Chambers of Commerce,

said reports of deepening economic

gloom were not surprising with uncer-

tainty over Brexit increasing.

“We are hearing this from busi-

nesses across the UK,” Thiru said.

“They are taking a step back and put-

ting off investment and recruitment

decisions because there isn’t a path

forward for Brexit, and economic con-

ditions are weakening.”

Thiru said businesses were frus-

trated that Brexit had dragged on for

more than three years, but he warned

weakening, including households’

view of their own fi nances – an impor-

tant measure which could feed through

to weaker high-street spending. Con-

sumers’ expectations for infl ation

reached their highest since 1990 after

the pound’s sharp fall since the threat

of a no-deal Brexit increased.

Gabriella Dickens, an economist

at Capital Economics, said rising

wages meant consumers should be

able to keep spending but that there

were signs households could soon be

gripped by a sense of malaise.

“There are some signs that house-

holds are becoming more susceptible

to the Brexit chaos which is already

keeping a lid on business spending,”

Dickens warned. “What happens with

Brexit in the coming months will deter-

mine how likely households are to

spend.”

Two other reports indicated the

country’s economic mood darken-

ing in August. Lloyds Bank’s monthly

survey showed business confi dence

dipped for the first time in three

months with sentiment weakening in

all sectors apart from manufacturing.

Market research institute GfK’s con-

sumer confi dence survey showed a

dip in overall sentiment as house-

holds became gloomier about their

own situation, the general economy

and willingness to make big purchases.

Off ers sought for

fi ve-a-side football

fi rm part-owned by

Sports Direct boss

Mark Sweney

Goals Soccer Centres, the struggling

fi ve-a-side football pitch operator in

which Sports Direct’s owner, Mike

Ashley, holds a signifi cant stake, has

been put up for sale.

The fi rm, which is to delist from the

London Stock Exchange after reveal-

ing a £12m tax accounting scandal

stretching back at least a decade, was

valued at just over £20m when trading

of its shares was suspended in March.

Goals, which employs 700 people

across 45 UK sites and four in the US,

appointed Deloitte in June to assess

options, including a potential sale.

In a stock market statement yester-

day Goals said it had “ commenced a

process to invite off ers for the busi-

ness and assets of the company ”. It

added: “There is no certainty as to the

timetable or outcome of this process.

Shareholders will continue to be kept

informed of developments .”

This month an investigation by

Goals , which is 19%-owned by Ashley’s

Sports Direct, uncovered “improper

behaviour” by individuals in the com-

pany in the preparation of its accounts

dating back to at least 2010.

The company said the discov-

ery meant it would be unable to fi le

its financial results by the end of

September.

that leaving the EU without a deal

would make matters worse. “There

will be questions about the UK’s trad-

ing relationship with the EU which will

need to be answered.”

With manufacturing and con-

struction shrinking and companies

unwilling to invest, the economy has

been kept afl oat by consumer spend-

ing supported by rising wages and high

levels of employment.

But the European commission’s sur-

vey showed UK consumer confi dence

Sa rah Butler

The Formula One star Lewis Hamil-

ton has teamed up with a nightclub

impresario and an early investor in a

plant-based meat substitute to back a

meat-free burger chain.

Neat Burger, which will open its fi rst

outlet just off Regent Street in Lon-

don on Monday, is currently raising

up to £15m to fund expansion. It has

lined up restaurants in Covent Garden

and King’s Cross , and is planning a US

launch next year and aiming to open

14 outlets around Europe over the next

two years.

Hamilton’s co-investors are Italian

entrepreneur Tommaso Chiabra and

Ryan Bishti. Chiabra was one of fi rst

backers of the US vegan burger maker

Beyond Meat, while Bishti owns the

Cirque le Soir nightclubs in London,

Manchester, Barcelona and Mykonos

and is redeveloping Soho’s Windmill

club.

Bishti said: “We are not aiming for

vegans or a plant-based niche, we are

aiming to convert meat-eaters. We are

part of a movement happening when

you look at the world today in the Ama-

zon, with deforestation for crops and

Hamilton

teams up with

investors in

new meat-free

burger chain

agri-farming. This is a perfect way to

make a change.”

Bishti said Neat Burger’s chefs

had spent 10 months working with

Los Angeles-based Beyond Meat to

develop their own patty based on the

US company’s plant-based burger mix.

Beyond Meat, which makes burg-

ers based on pea protein from yellow

peas and uses beetroot juice to ooze

or “bleed”, joined the US stock mar-

ket in May and its shares have since

climbed 150%, valuing the business

at nearly $10bn (£8.2bn).

It has previously teamed up with

the UK restaurant chain Honest Burg-

ers on a vegan burger, and is also

working with KFC in the US to produce

a meat-free version of the fast food

chain’s chicken nuggets and wings.

With the number of UK vegans

soaring , and many more people opt-

ing to go meat-free a few times a week,

manufacturers, supermarkets and res-

taurants are scrambling to cash in.

The consumer goods giant Unilever

bought meat substitute company the

Vegetarian Butcher , while sausage roll

specialist Greggs is working on vegan

versions of all its bestselling products,

from steak bakes to pasties , after the

success of its vegan sausage roll.

Hamilton, who stopped eating meat

in 2017, has a “ signifi cant stake” in

Neat says Bishti, who is the majority

owner of the business with Chiabra.

The F1 Mercedez-Benz driver is the

UK’s richest sportsman with a fortune

of some £187m, according to the Sun-

day Times Rich List.

 Lewis Hamilton, who stopped

eating meat in 2017, and (above)

a Neat Burger outlet

MAIN PHOTOGRAPH: MARK THOMPSON/GETTY

Neat Burger’s patties will

be entirely plant-based

‘Businesses across

the UK are taking a

step back and putting

off investment’

Suren Thiru

BCC’s head of economics

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