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Confidence Defection After Election

Confidence Defection After Election
Jun 15
👤 by Brian Shillibeer

The first poll of business leaders since the General Election has revealed a dramatic drop in business confidence and huge concern over political uncertainty and its impact on the UK economy, says the Institute of Directors.

Company directors see no clear way to quickly resolve the political situation, feeling that a further election this year would have a negative impact on the UK economy.


EU worker clarity

The nearly 700 members of the Institute of Directors who took the survey are looking for any political certainty that can be found and are keen to see quick agreement with the European Union on transitional arrangements surrounding the UK’s withdrawal - and clarity on the status of EU workers in the United Kingdom.

The overall priority for the new Government, according to IoD members who have taken the survey since noon Friday 9, must be reaching a new trade deal with the European Union. On the domestic front, work to deliver a higher skilled workforce and better quality infrastructure is considered vitally important.

Stephen Martin, Director General of the Institute, said: “It is hard to overstate what a dramatic impact the current political uncertainty is having on business leaders and 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. This crash in confidence shows how urgently that must change in the new Government.

“Business leaders will be acutely aware that Parliaments without majorities are more prone to politicking and point-scoring than most.

“Saying this, there is also little appetite for a further election this year and indeed, business leaders are keener to see the new Government get to work in Brussels and on the domestic front. Ensuring negotiations start well and delivering higher quality skills and infrastructure across the country, must be the priority.”


The key findings of the survey:

65% of IoD members believe uncertainty over the make-up of the Government is ‘a significant concern’ for the UK economy.

There has been a negative swing of 34 points in confidence in the UK economy from last IoD survey in May. While 20% are optimistic about the UK economy over the next 12 months, some 57% are now either quite or very pessimistic – a -37 ‘net confidence’ score. This compares with May, in which 34% registered their optimism, and only 37% reported pessimism – just -3

A majority (59%) believe a further election later this year would be somewhat or very unwelcome. Only 23% felt a further election would be welcome

 Asked to choose three areas of Brexit negotiations which should be prioritised by the new Government, more than half – 58% - chose agreement on rights and entitlements for EU citizens in the UK and vice versa. In joint-second, negotiating an early agreement on transitional arrangements and securing ‘zero for zero’ tariffs were both chosen by 38% of business leaders.

Picture: IoD Members are lacking business confidence since the Election shambles


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