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Hung Parliament causes 'dramatic drop' in UK business confidence

Staff Writer | June 12, 2017
The first poll of business leaders since Thursday’s General Election reveals a dramatic drop in business confidence and huge concern over political uncertainty, and its impact on the UK economy.
UK Parliament
Britain   UK business confidence
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.

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 on Friday, 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.

65% of IoD members believe uncertainty over the make-up of the Government is ‘a significant concern’ for the UK economy, with a further 27% describing it as a ‘slight concern’ – a total of 92% therefore believing it to be a concern.

There has been a negative swing of 34 points in confidence in the UK economy from our last 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.