A quarterly index of sentiment slumped to minus 47 in July from minus five in April.
That’s the lowest since early 2009, when the UK was in the midst of five straight quarters of contraction.
A monthly gauge of export orders fell to the weakest since January.
The report — conducted between June 27 and July 13 — is the latest in a string of surveys showing the June 23 referendum result hit confidence.
An index of services and manufacturing published by Markit Economics last Friday showed a “dramatic deterioration” in July, with business activity shrinking at its fastest pace in seven years.
“A cloud of uncertainty is hovering over industry, post-Brexit,” said Rain Newton-Smith, chief economist at the CBI.
“It’s important for the new government to steady the ship with a plan, and a clear timetable, for negotiating the UK’s relationship with the EU.”
The darkening outlook adds pressure on the Bank of England to deliver additional stimulus when policy makers meet next week.
While chancellor of the exchequer Philip Hammond has said he’s ready to “reset” Britain’s fiscal policy if needed, the Bank of England will handle any short-term fallout “using the monetary tools at their disposal”.
Policy makers, led by Bank of England governor Mark Carney, are due to publish their quarterly Inflation Report alongside their latest decision on August 4. Minutes of the July decision said “most” of the nine-member committee expect loosening at the next gathering.
Last Friday’s Markit survey showed UK services and manufacturing shrank and a gauge of the private-sector economy plunged to 47.7, well below the 50 level that divides expansion from contraction.
The slump was the strongest evidence yet that politics is propelling the world’s fifth largest economy into recession.
It intensifies pressure on the Bank of England to deliver fresh monetary stimulus and on the government to reverse fiscal austerity.
Although consumer confidence might hold up for the next few months, businesses are putting the brakes on investment, analysts said.
The gauge of services, the biggest part of the economy, dropped to 47.4. The slide in the composite Purchasing Managers’ Index was sharper than economists had predicted and was the biggest drop on record.