The vast majority of UK companies are expecting revenues to fall next year, and most business leaders say Brexit is to blame, according to new research.

In a survey of 200 large and medium-sized firms across the UK, data specialist MHR Analytics found that 93 per cent of business chiefs expect a drop in revenue in 2019, with 57 per cent citing Brexit as the reason.

The findings follow a call by the Federation of Small Businesses for the government to “do everything in its power” to avoid a no deal Brexit, which has become increasingly likely over recent weeks, to the extent that companies have begun stockpiling goods in anticipation of huge delays to trade due to customs disruption.

According to the MHR survey, reduced consumer spending was the second most-cited reason for expectations of revenue decline, at 22 per cent, followed by the introduction of new legislation, such as GDPR.

When asked how they were preparing for the impact of reduced revenues, 59 per cent of companies said they were planning to increase investment in IT, while 49 per cent said they would spend more on marketing. Meanwhile, 46 per cent plan to increase sales budgets and 38 per cent will invest more in operations.

MHR said the responses showed firms were looking at ways to “take the risk out of decision making”, particularly in operational areas, and said it is important for companies to focus increased IT investment on Big Data. “In uncertain business climates, the ability to make clear decisions based on accurate information is critical,” MHR said.

Nick Felton, senior vice president at MHR Analytics said: “It’s clear that businesses are braced for significant turbulence next year and are planning major investment in key areas to power through an anticipated drop in revenues.

“Despite these fears, companies are adopting a combative approach to this problem, with departments such as IT, marketing and sales all set for a cash injection.”

The research follows a more optimistic outlook shared by the Lord Mayor of the City of London, Charles Bowman, who told Politico on Wednesday that the predicted number of job losses from the City due to Brexit was likely to be lower than previously expected.