Confidence among British bosses has plummeted in the run-up to the general election, as recruitment and investment plans slump.
In a bleak survey published today, the Institute of Directors (IoD) said the economic confidence index – which measures bosses’ optimism about the economy – has fallen to its lowest level in four months.
The figure fell from -3 in May to -14 in June.
That came as around 10 percent of business leaders said last month they were “very pessimistic” about the wider UK economy, while just 1 percent were “very optimistic”.
Anna Leach, chief economist at the IoD, said the figures were “disappointing” and reflected falling investment plans among bosses, as well as slow hiring in the coming year. She added that the election meant companies were reluctant to make commitments at a time of political uncertainty.
Best way forward: Labor plans to introduce a range of pro-worker schemes, including scrapping zero-hours contracts, faster access to statutory sick pay and a ‘right to switch off’
The figures come just days before the country goes to the polls. Polls predict a landslide victory for Labour.
However, some business leaders have raised concerns about a number of Sir Keir Starmer’s policies, including a review of workers’ rights and a North Sea tax raid.
Labor plans to introduce a range of pro-worker schemes, including the scrapping of zero-hours contracts, faster access to statutory sick pay and a ‘right to switch off’.
But top industry figures have criticized these policies amid fears changes could cripple thriving British businesses. In April, Sir Martin Sorrell, chief executive of S4 Capital, called the policies “Labour’s Achilles heel”.
According to Archie Norman, chairman of Marks & Spencer, the changes could make it difficult for Britain to attract investment.
The Institute for Fiscal Studies (IFS) reported last week that Labour’s “new deal for working people” would increase costs for businesses, forcing many firms to cut wages or hours.
It said: ‘For some workers – such as those who value paid sick leave or paternity leave rights – that trade-off may be welcome, but for others it may not.’
The oil and gas industry has also spoken out against Labour’s plans for a ‘real windfall tax’ on the North Sea, which would increase the rate from 75 percent to 78 percent. According to investment bank Stifel, the increase could lead to the loss of 100,000 jobs.