Image copyright PA Image caption Business groups call on the government to push ahead with infrastructure projects after it delayed a decision on London airport expansion

Business groups have called on the government to push ahead with infrastructure projects and provide reassurance for EU workers living in the UK following the Brexit vote.

Five of the UK's biggest business groups said the policies would provide a "shot in the arm" for the economy.

"This may be a time for calm reflection, but it is not a time for inaction," they said in an open letter.

George Osborne will meet bank bosses on Tuesday to discuss Brexit.

Earlier, the chancellor told MPs: "Over the past 10 days I have had numerous conversations with various business leaders and leaders of financial institutions, and tomorrow I will be meeting the heads of some of the major banks to discuss how we proceed."

He warned a "supreme national effort" was needed to steady the economy.

'Critical projects'

The British Chambers of Commerce, the Confederation of British Industry, the Federation of Small Businesses, the Institute of Directors, and EEF, the manufacturers' organisation, signed the letter saying ministers needed to show "clear leadership".

On infrastructure, they said last week's delay to a decision on airport expansion must not "set the tone" for other long-planned, critical projects.

The government must also confirm that EU nationals working in the UK have the right to continue living here, the groups said.

"Both because it is the fair thing to do, and because their skills are crucial to the success of our businesses," they wrote.

It comes as research suggests business confidence has fallen sharply in the aftermath of the vote to leave the EU.

YouGov and the Centre for Economics and Business Research said the share of businesses that reported feeling pessimistic about the UK economy doubled in the week after the Brexit vote, from 25% the week before the referendum to 49% after.

'Ethical position'

Earlier, Conservative MPs warned the government risked worsening the UK economy if it did not provide such guarantees to the three million EU citizens living in the UK.

Andrew Tyrie, the chair of the Treasury select committee, said: "Protecting their rights is the only ethical position that can be taken and what's more, the longer the uncertainty about this question persists the greater the risk of the economic downturn and economic consequences."

Home Secretary Theresa May, who is bidding to become the next Conservative leader and prime minister, has said residence rights would be a factor in Brexit negotiations.