UK businesses plead for political stability as economic conditions deteriorate

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Business leaders warned on Thursday that the resignation of Liz Truss spelled further uncertainty for UK businesses already facing deteriorating economic conditions.

Shevaun Haviland, chief executive of the British Chambers of Commerce, said the next prime minister must “restore both political and economic stability”.

“The new administration must immediately define how it intends to deal with soaring energy bills, labor shortages, soaring inflation and soaring interest rates,” he said. she declared. “Policy flip-flops have led to a decline in consumer and business confidence.”

Companies face a nervous wait to see who will replace Truss. Many business leaders wanted to see former Chancellor Rishi Sunak take over from Boris Johnson, after working closely with him on business support programs during the coronavirus pandemic.

Sunak was seen as the safest pair of hands among the leadership contestants, due to the likelihood of further administration continuation policies, including investment tax incentives, which had been popular with some business groups.

Company executives initially hailed Truss’s wish for a pro-business, pro-growth premiership, ignoring warnings about the effects of his tax-cutting program on the economy amid the eagerness to restore relations with Downing Street.

But business confidence has plummeted since the summer as companies face new threats from soaring inflation, and in particular spiraling energy bills and rising interest rates. .

The Government’s ‘mini’ budget in September – much of which has since been canceled by new Chancellor Jeremy Hunt – has directly led to lower confidence and higher costs, many leaders say.

Bosses said on Thursday that British businesses were postponing investment decisions due to political uncertainty, which has also eroded overseas investor confidence.

Tony Danker, chief executive of the CBI, Britain’s largest business group, said the recent political turmoil had “undermined the confidence of people, businesses, markets and global investors in Britain. This must now stop if we are to avoid even more damage to households and businesses.”

He added that Truss’s successor must act urgently to restore confidence by “delivering[ing] a credible medium-term fiscal plan as soon as possible, and a plan for the long-term growth of our economy”.

Richard Burge, director of the London Chamber of Commerce and Industry, said it was “shocking that the government has unleashed chaos in recent weeks, damaging our economy and jeopardizing our position on the world stage. “.

He said Truss’s resignation would “not bring instant relief” or “magically instill confidence among the many companies trading in the worst economic climate in decades.”

Confidence among UK small business owners has fallen to its lowest level since the peak of the coronavirus pandemic as they face rising costs and falling income, according to the Federation of Small Businesses.

FSB National Chairman Martin McTague said businesses were “calling for an end to the political unrest and focused on fixing the economy, supporting small businesses through the harsh winter ahead”.

BCC’s Haviland said the government needed to review the energy support program for businesses, which was due to end next April, as well as address the shortage of skilled labor and set out a strategy to boost exports.

“People run businesses and businesses depend on people. The new administration must understand that the cost of living and business cost crises are two sides of the same coin.

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