McEwan also noted that according to the bank’s predictions a no-deal Brexit could push the UK into recession and added that it was becoming cautious about lending into certain sectors, including construction.
Speaking in an interview with the BBC, McEwan said the lender would expect around 1-1.5% growth in the UK economy next year with an “OK Brexit”.
“But if we get a very hard Brexit scenario with other factors then it may very well be less than that and the economy may go down to zero or negative growth next year if Brexit is very, very harsh,” he said.
McEwan revealed that RBS was already seeing the effects of Brexit in the property sector, echoing analysis by Specialist Lending Solutions earlier this week.
He said: “The big construction companies are getting very cautious about where they are putting their capital – particularly around London.”
Large firms holding back
And it appears Brexit uncertainty is also hitting the wider economy.
McEwan said that larger businesses in particular were holding back on investment and waiting to see how good or bad the situation is in six months before deciding whether to invest in the UK or elsewhere.
However, more positively he noticed that smaller, local businesses were generally continuing to operate as normal, borrowing and seeking to grow their firms.
The bank is also being more cautious about which businesses it lends to, with an emphasis on operations that are able to operate in the digital world.
“We have had some sectors that we have been a bit more cautionary about, particularly when companies haven’t made the transition into a more digital space, but we’ve been lending right throughout,” he added.
Brexit hitting entrepreneurs
According to research published last month by NatWest, which is part of RBS, Britain’s entrepreneurial aspirations have fallen since the EU referendum.
Almost one in five of more than 5,500 adults surveyed cited Brexit uncertainty as one of the biggest barriers to starting a new business.
The research also revealed that young adults, often portrayed as risk takers, saw more barriers to starting a business than the general population.
While one in 10 young people reported to be in the process of starting their own business or enterprise in 2012, this has fallen to just 2% in July 2018.
