BUSINESS leaders’ confidence in the UK economy has tumbled to its lowest for more than 18 months as Brexit fears dominate, a poll by the Institute of Directors reveals.
The poll of 724 company directors, conducted between December 5 and 20 and published today, shows business leaders in all nations and regions of the UK are pessimistic over the economic outlook on a 12-month view.
The IoD noted that its confidence tracker showed overall optimism about the economy had recovered to be in positive territory briefly earlier this year, boosted by the initial agreement of a Brexit transition period. But the IoD flagged the fact that business leaders’ optimism over the UK economy had fallen steadily since April.
Tej Parikh, senior economist at the IoD, said: “Business leaders are looking ahead to the new year with trepidation about the economy. While we saw cautious optimism emerging when the Brexit talks appeared to be moving towards a transition period after March 2019, that has utterly dissipated now. There can be no doubt that the tumultuous Brexit process is having a damaging impact on firms’ outlooks. The prospect of a no-deal in the near future will be weighing heavily on directors’ minds.”
He added: “Politicians must not forget that every day of Brexit confusion is a day we aren’t focused on the long term. Leaving the EU has consumed the political agenda since the referendum, deflecting attention from critical challenges we face, including boosting growth across the UK and addressing widening skills gaps.”
The IoD noted investment would likely remain subdued. It flagged its finding that, subtracting the proportion expecting to cut investment from that planning to increase capital expenditure, only a net seven per cent of business leaders anticipate a rise.
Mr Parikh said: “Uncertainty is already causing businesses to delay investment, hiring decisions and product launches, which also acts to weaken our international competitiveness further down the line. The longer this state of affairs continues, the more we lose by it, even if these effects aren’t apparent in the here and now.”
The IoD observed business leaders nevertheless remained relatively upbeat about the prospects for their own firms.
Source: Herald Scotland