- Emma Walsh
BUSINESS CONFIDENCE SINKS AS UK FACES SLOWDOWN IN ECONOMIC GROWTH
The UK General Election has had an adverse impact on business confidence, with the country facing heightened uncertainty and a slowdown in economic growth according to the latest edition of the Global Economic Conditions Survey (GECS), released today.
The quarterly survey of global CFOs and finance professionals, conducted by ACCA (the Association of Chartered Certified Accountants) and IMA (the Institute of Management Accountants), found that economic confidence in the UK is now at its lowest level since the final quarter of 2011.
The economic outlook looks set to deteriorate further in subsequent quarters, as a combination of high inflation, low growth and negative real wage growth hit home.
‘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 indicates business uncertainty is likely to pick up as Brexit approaches.
‘Worryingly, companies only seem to be in the initial stages of planning for a post-Brexit UK,’
‘More than two-thirds of businesses surveyed have no plans or are unclear about what to do; or are still in early stages of planning.’
Globally, the GECS results were more positive, with all main economies set for decent growth over the coming years.
‘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,’
‘The IMF recently upgraded its forecasts for global growth to 3.5% in 2017 and 3.6% in 2018, up from just 3.1% last year. Given the improving outlook, this is looking more than achievable.’