A majority of business boardrooms are predicting a downturn in the UK economy over the coming year, as Brexit uncertainty and trade war troubles take a toll on corporate confidence.
Almost 70 per cent of respondents from FTSE 350 companies believe that the UK economy will decline in the next 12 months, improving from 81 per cent at the end of 2018 but still remaining significantly below the spring reading in 2016 before Britain voted to leave the EU.
Forecasts about the outlook for companies’ own industries have rallied slightly with 43 per cent predicting a decline, down from 50 per cent last winter, according to the findings from the ‘Boardroom Bellwether’ survey published by The Chartered Governance Institute in association with the FT.
Publicly-listed companies in the UK are on the fence about the effect of no-deal Brexit, today’s report found, with 40 per cent believing it would be damaging, 40 per cent believing it would not and 20 per cent unsure.
“The continuing uncertainty about what a post-Brexit Britain might look like, muddled even further at the time of the survey by the Conservative party leadership contest and differing views with regard to a no-deal Brexit, has undoubtedly contributed to the pessimism that people are feeling,” said Peter Swabey, policy and research director at The Chartered Governance Institute.
Meanwhile, the perception of the UK government as business-friendly has fallen from 29 per cent in summer 2018 to 15 per cent this summer, while the number of respondents viewing the government as not business-friendly has risen sharply from 13 per cent in winter 2018 to 42 per cent.
Despite this, the opposition has not benefited with 81 per cent of respondents viewing Labour as not business-friendly and not one respondent considering that it is, the lowest result since winter 2015 when two per cent believed them to be business-friendly.
“The survey was carried out before Boris Johnson was chosen as the Conservative leader, but it does seem that the business-bashing of recent times has taken its toll. The government must remember that business plays a key part in creating wealth and employment,” said Swabey.
By Sebastian McCarthy
Source: City AM