Business confidence has plummeted in the wake of the General Election, according to a new report, as the country faces heightened uncertainty and a slowdown in economic growth.
A global survey of chief financial officers and other finance professionals, conducted by the Association of Chartered Certified Accountants (ACCA) and the Institute of Management Accountants (IMA), found economic confidence was at its lowest level since the final quarter of 2011.
Respondents believed the economic outlook would deteriorate further as a combination of high inflation, low growth and negative real wage growth bites.
“This is the most challenging economic situation the UK has seen in several years,” explained Narayanan Vaidyanathan, ACCA senior business analyst.
“Recent political developments, from Brexit to an unexpected General Election outcome, have contributed to a sharp fall in the pound which has increased import costs and inflation and decreased household purchasing power.
“Consumers have been cutting savings and borrowing more, which is not sustainable in the longer term.”
The survey also found that businesses were only in the initial stages of planning for a post-Brexit environment, which Vaidyanathan said was “worrying”.
Outside of the UK, the results were more positive. “A combination of a gentler than expected slowdown in China and consumption growth driving recovery in the US and elsewhere has led to a fairly positive global outlook for this quarter,” said Raef Lawson, executive vice president at IMA.
Lawson pointed to the International Monetary Fund's forecasts, which were recently upgraded to 3.5 per cent global growth in 2017 and 3.6 per cent in 2018.