THE BRITISH business community has voiced strong dissent against growing political uncertainty and lack of reassurance over Brexit negotiations, with the director of a high-profile trade body warning of potentially “disastrous consequences” for the UK economy.
57 per cent of company directors are pessimistic about the country’s economic prospects over the next 12 months, compared to 37 per cent in May, a survey of 700 sector executives by the Institute of Directors (IoD) revealed on Monday.
And 92 per cent of respondents believe that uncertainty over the make-up of the government is a concern for the UK economy.
When it comes to their own businesses,76 per cent believe political uncertainty is either a significant or a slight concern for their organisation. 40 per cent are optimistic about the year to come with regards to their own organisation, with 23 per cent pessimistic. This is a marked slump in confidence from the IoD’s May survey.
“It is hard to overstate what a dramatic impact the current political uncertainty is having on business leaders,” said IoD’s director general Stephen Martin.
“The consequences could – if not addressed immediately – be disastrous for the UK economy. The needs of business and discussion of the economy were largely absent from the campaign, but this crash in confidence shows how urgently that must change in the new government.”
The evidence of a sharp decline in business sentiment comes as politicians grapple with the unexpected electoral result of a hung parliament and thus increased tension and uncertainty over the country’s Brexit strategy.
“Business leaders will be acutely aware that parliaments without majorities are more prone to politicking and point-scoring than most,” said Martin.
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“If we do indeed see a minority government, both sides of the aisle must swallow their pride and work on a cross-party basis on the most important issues.”
The top concern for 72 per cent of the surveyed business directors was that the government should secure favourable trade agreements with the EU, before setting up stronger policies to favour growth domestically.
“The next government will need to be more pragmatic and more flexible over Brexit negotiations – people voted to leave, they didn’t vote to make themselves more poor,” the Iod’s head of campaigns and deputy director Andy Silvester told Peer2Peer Finance News.
“The most obvious impact of current uncertainty is that yet again businesses are questioning whether they are in position to invest at all.
“We urgently need to see the next government take steps to encourage investment over the next six to 12 months.”
A failure to address these issues could cause the country’s economic growth estimates to collapse, he warned.