In Brief

General election 2017 results: Business confidence 'through the floor'

IoD reports 'dramatic drop' in optimism, while Moody's says outcome is 'credit negative' for UK

Business confidence is "through the floor" following last week's general election, reports the BBC.

A "snap poll of 700 members of the Institute of Directors (IoD)" found a "dramatic drop" following the result, which left the UK with a hung parliament.

"Members saw no clear way to resolve the political impasse quickly", adds the BBC, but there is "no desire" for another election this year, with business leaders feeling this would be "negative for the UK economy".

Theresa May proposed deal with the Democratic Unionist Party to cling to power in a minority government is expected to be a far less stable arrangement than prior to the election.

It could also mean the Tories having to make significant compromises on their manifesto, not least on Brexit.

In one sense, businesses have been emboldened by the election result and are calling for a softer exit from the European Union.

IoD members want "a rapid agreement with the EU on transitional arrangements for Brexit, along with clarity on the status of EU workers in the UK", says the BBC, adding: "A separate survey of more than 50 medium-sized businesses and trade associations by the Harvard Kennedy School of Business found that 'almost all' expressed a preference for remaining in the single market and customs union."

However, Sir Martin Sorrell, chief executive of advertising giant WPP, told City AM he felt the election meant that "paradoxically", the chances of both a soft Brexit and a "no deal" scenario have both increased.

Basically, the Tories now have less of a mandate for a hard Brexit, but also less parliamentary stability to secure any deal at all.

Meanwhile, because the "election outcome will complicate and probably delay Brexit negotiations", it is "credit negative" for the UK, according to Moody's, reports The Guardian

The ratings agency also believes the "election outcome, with significant gains for the Labour Party which had campaigned for increased public spending, will [mean the] public debt ratio will rise further and for longer than we had expected".

This is also seen as negative for the UK credit rating as it will place "the UK among the few highly rated European sovereigns whose public debt is still rising". 

Recommended

Facebook: is it ‘monetising misery’?
Facebook co-founder and CEO Mark Zuckerberg
Why we’re talking about . . .

Facebook: is it ‘monetising misery’?

Universal Music: don’t stop me now…
Lucian Grainge is CEO of Universal Music Group
In Brief

Universal Music: don’t stop me now…

The Chase app: challenging the challengers
JPMorgan Chase CEO Jamie Dimon: fintech challenge
Expert’s view

The Chase app: challenging the challengers

‘Netflix of sport’ DAZN in advanced talks to buy BT Sport 
DAZN cameraman
In Focus

‘Netflix of sport’ DAZN in advanced talks to buy BT Sport 

Popular articles

Doctor says we should not sleep naked because of flatulent spraying
The feet of a person sleeping in a bed
Tall Tales

Doctor says we should not sleep naked because of flatulent spraying

Penguins ‘might be aliens’
Penguins
Tall Tales

Penguins ‘might be aliens’

The man tasked with putting a price on 9/11’s lost lives
Kenneth Feinberg at a Congressional hearing
Profile

The man tasked with putting a price on 9/11’s lost lives

The Week Footer Banner