Britain’s business leaders have lost confidence in the health of the UK economy and worry more about the prospects for it in 2019 than at any time in the past 18 months, a leading corporate lobby group said on Thursday.
In its monthly survey of members’ views, undertaken in December as the political impasse over Brexit intensified, the Institute of Directors found confidence in the economy had sunk below the level recorded after the inconclusive general election of last year.
The findings echo those of other surveys published over the past month, with Lloyds Banking Group finding that business confidence was at its lowest point since after the 2016 EU referendum and Bank of England agents reporting heightened corporate concern about Brexit.
The IoD survey of 724 directors between December 5 and 20 found many were upbeat about their own groups’ prospects in 2019, but confidence in the UK economy has been sliding since the spring of 2018.
In April, 3 per cent more respondents to the IoD survey were optimistic about the outlook for the UK economy than were pessimistic. By December, 38 per cent more respondents were pessimistic than were optimistic.
Business confidence was almost that negative in 2017 — shortly after the Conservatives lost their Commons majority at the June election — when 37 per cent more respondents were pessimistic than were optimistic.
In the latest survey, there was no clear pattern between directors of large, medium and small companies, but those with the largest groups — generally the most likely to trade overseas — were the most negative.
Business leaders reported that the general state of the economy and the UK’s uncertain long-term trading relationship with the EU after Brexit were top of their lists of worries for 2019.
The economy has recorded sluggish growth this year, partly because of weak productivity but also because of Brexit-related uncertainty.
The UK and the EU agreed a Brexit deal in November, but prime minister Theresa May this month postponed a crunch parliamentary vote on the withdrawal agreement because she faced likely defeat because of opposition from Eurosceptic Conservative MPs and the Democratic Unionist party, which is meant to be propping the government in the Commons.
Tej Parikh, economist at the IoD, said: “Business leaders are looking ahead to the new year with trepidation about the economy.
“Politicians must not forget that every day of Brexit confusion is a day we aren’t focused on the long-term.
“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.”
Business leaders’ confidence was weakest in London and Scotland, two regions that voted strongly for the UK to stay in the EU in the Brexit referendum.
Confidence was strongest in the south-west and the north-east of England, which voted for Brexit.