Uncertainty over trade with the European Union is a top concern of UK business leaders, a survey has revealed.
The Institute of Directors’ survey published today shows that, aside from coronavirus and the wider economic conditions, the top concern of UK business leaders is uncertainty over trade with the EU.
The UK remains in talks with the EU on a trade deal, with less than three months to go until the end of the transition period which has kept Britain in the European single market, Other concerns included broadband problems and skills gaps, which the IoD said was suggestive of the impact of remote working.
The survey also shows the recovery in business leaders’ investment and hiring intentions has stalled. And employment expectations for the year ahead remained negative.
Directors’ confidence about the economy varied between different parts of the UK, with those in Yorkshire, the East Midlands, and north of England “notably less negative than those in London or Scotland”, the IoD said.
Tej Parikh, chief economist at the IoD, said: “The overall business outlook appears to be stuck in the doldrums. The current restrictions put a lid on demand for a number of sectors, but local lockdowns and the prospect of stricter measures down the road are putting even more businesses in a bind. It’s crucial that the test and trace system can start firing on all cylinders to ease some fears. Ongoing support for firms' cashflow will also be crucial."
He added: “With hiring intentions bleak and redundancies expected in sectors such as hospitality, the Treasury should step in to support job creation. Lowering employment costs will be crucial to help firms that are doing well to pick up the slack.
“The Prime Minister rightly emphasised the UK’s long-term productivity challenge this week. Business investment will be key to any attempt to lift output, but this could be limited by the impacts of the virus.
Giving SMEs extra headroom through (small and medium-sized enterprises) tax reliefs to spend on new technology and adaptations could help raise business spending.”