Business confidence ‘dropped dramatically’ after election, reveals IOD poll

11-Jun-2017 - Last updated on 12-Jun-2017 at 15:45 GMT

‘Disastrous’ for economy: Business confidence drops says survey

A poll of nearly 700 business leaders revealed that business confidence dropped dramatically following the general election on 8 June.

The survey by the Institute of Directors (IOD) showed there was “huge concern” among business leaders over the current political uncertainty and its impact on the UK economy.

Company directors told the IOD they see “no clear way” for the political situation to be resolved quickly, and warned that a further election could have a “negative impact” on business.

Poll respondents said the main priority for the new Government must be to reach a new trade deal with the European Union and clarify the status of EU workers in the UK.

‘Disastrous’ for economy

Stephen Martin, director general of the IOD, said that if the uncertainty is not addressed immediately it could 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,” he said.

“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.”

Martin said the priorities for the Government must be to make a good start with EU negotiations and deliver higher quality skills and infrastructure across the country.

Consumer confidence

Kate Nicholls, chief executive of the Association of Licensed Multiple Retailers, said that the current political uncertainty not only undermines business confidence and investment, but damages consumer confidence as well.

“We need quick and decisive action to dispel the jitters,” she said. “At a domestic level, that means acting quickly to confirm we have a Government in effect not just in name, with a concerted focus on the issues that matter most to the economy and [for] prosperity. It also means all parties working together in the national interest.”

Brigid Simmonds, chief executive of the British Beer & Pub Association, agreed the current political uncertainty is not good for the “whole business community”.

The sector is already dealing with a “great many new costs and regulatory challenges this year”, she said, adding that she hoped the new Government would do what they could to provide a “climate that allows business to create jobs and growth”.

Talks between Conservative Prime Minster Theresa May and the Democratic Unionist Party to agree a deal to govern the UK were ongoing this morning.