Business leaders’ confidence in the British economy has plummeted as uncertainty about Brexit continues ahead of the March 29 withdrawal date.
The cautious optimism shown by company bosses earlier in 2018 has entirely gone, according to a survey by the Institute of Directors (IoD).
Overall optimism, which had briefly reached positive territory following the initial agreement of a Brexit transition period, has fallen steadily since April and hit its lowest point in December.
All regions and nations of the UK are now reporting a pessimistic outlook for the 12 months ahead.
Directors remain confident in the future for their own organisations with a net 30% positive rating, but the response for the economy overall was a net minus 38%, the lowest for 18 months.
The IoD’s findings are based on 724 total respondents, with work conducted between December 5-20. Studies in previous months have involved between 700 and 1,000 bosses.
The main concerns highlighted by IoD members were general economic conditions, the trading relationship with the EU and skills shortages.
The lack of clarity about whether or not the UK will leave the European Union with a Brexit deal – and the crucially important transition period to avoid a sudden change in trading conditions – appears set to hold back investment.
The IoD’s findings indicated that a net balance of just 7% of business leaders expected to invest more in the next year.
Tej Parikh, senior economist at the Institute of Directors, said: “Business leaders are looking ahead to the new year with trepidation about the economy.
“While we saw cautious optimism emerging when the Brexit talks appeared to be moving towards a transition period after March 2019, that has utterly dissipated now.
“There can be no doubt that the tumultuous Brexit process is having a damaging impact on firms’ outlooks. The prospect of a no-deal in the near future will be weighing heavily on directors’ minds.
“Uncertainty is already causing businesses to delay investment, hiring decisions and product launches, which also acts to weaken our international competitiveness further down the line.
“The longer this state of affairs continues, the more we lose by it, even if these effects aren’t apparent in the here-and-now.”
The Centre for Economics and Business Research (CEBR) said “disruption” to the British economy was inevitable due to lower inward and business investment.