LONDON (Reuters) - British businesses turned less gloomy last month about Brexit's eventual impact even though they expected the uncertainty to persist for longer, according to a survey conducted either side of Prime Minister Boris Johnson's election win.
While most businesses still think Brexit will hurt sales over the long run rather than increase them, the gap narrowed in December, the Bank of England's monthly Decision Makers Panel showed on Thursday.
The proportion expecting an eventual sales boost from Brexit rose to 17% from 13% in November, the highest since May 2018, the BoE survey showed.
Those expecting an eventual hit to sales fell to 33% from 37%.
(GRAPHIC-Brexit pessimism in UK business decreases in December link: https://fingfx.thomsonreuters.com/gfx/polling/1/647/643/Annotation%202020-01-02%20114518.png)
Investors are watching for signs that Johnson's victory in the Dec. 12 election has lifted worries about Britain's political stability, potentially providing a much-needed boost to the economy which slowed to a crawl in late 2019.
Still, the outlook in the short-term remains challenging.
The BoE survey showed 53% of businesses cited Brexit as one of their top sources of uncertainty, the lowest share in six months and down from 55% in November.
Separately on Thursday, a British Chambers of Commerce survey of businesses showed "protracted weakness" across the economy in the fourth quarter, while an IHS Markit/CIPS report confirmed the sharpest decline in factory output since 2012.
Johnson has said he will clinch a deal settling Britain's future trade ties with the European Union before a deadline on Dec. 31 2020, although trade experts are skeptical about the chances of a comprehensive agreement being struck by then.
Some 42% of companies who took part in the BoE survey did not expect Brexit uncertainty to be resolved until 2021 at the earliest, up from 34% in November.
The survey of 2,887 business executives was conducted between Dec. 6 and Dec. 20.
(Reporting by Andy Bruce; Editing by William Schomberg)