Confidence among British business leaders has declined significantly and remains low, according to two reports that suggest the lack of progress over Brexit continues to cast a shadow over the UK economy.
A poll of FTSE 350 businesses by ICSA: the Governance Institute found that 55% of UK company board members are predicting a decline in their business over the coming year. This compares to 24% six months ago when the group last surveyed them.
Oddly, fears about Brexit appear to have lessened slightly as 42% of respondents rate a UK exit from Europe as potentially damaging, down from 54% a year ago.
However, no respondents are rating Brexit as “positive”, compared to 9% who did so when they were asked in the winter of 2016.
Optimism among the business leaders polled was in short supply. Only 6% of directors said they are anticipating an improvement in their fortunes over the next 12 months.
“It is hard to see any other reason for continuing pessimism over the economy other than the ongoing government infighting over Brexit and the lack of a clear plan if there is no deal at the end of the negotiations,” Peter Swabey, the policy and research director at ICSA, said.
Confidence in the global economy, he said, is higher, with 25% of respondents anticipating an improvement in the next 12 months (down slightly from 29% in the summer of 2017).
Aside from Brexit, he said UK boards appear preoccupied with risk, boardroom diversity and the gender pay gap. The number of boards looking to reduce the gender pay gap has risen to 69%.
Meanwhile, a separate survey of chartered accountants has concluded business confidence fell significantly over the past three months and has not been this bad since the 2017 general election, which returned a hung parliament.
Iain Wright, the ICAEW director of corporate and regional engagement, said: “This is a difficult time to run a business. With the increase in the regulatory burden along with the uncertainty with Brexit, global trade disputes and weak economic data, it is not surprising that confidence is so fragile.
“The lack of clarity for UK plc has continued for far too long and, without significant action by government, the fragility in confidence will be prolonged. Businesses are fast running out of time to get prepared and are rightly anxious about an expected further wave of regulation, dampening confidence and impacting upon growth.”
The institute’s business confidence monitor found retail and construction were by far the most downbeat sectors. Those working in the IT and business services areas were faring much better, according to the survey.
Wright said regulatory requirements continued to dominate the list of rising challenges for those surveyed, with 58% citing them as a bigger challenge – the highest since the survey began.
Regionally, Yorkshire and the Humber and the south-west recorded the lowest confidence levels, while the West Midlands and Scotland were the most optimistic, he said.
