Business leaders on Thursday warned that the resignation of Liz Truss further destabilizes British companies already facing a worsening economic situation.
Shevaun Haviland, general manager of British Chamber of Commercesaid the next prime minister needed to “return both political and economic stability”.
“The new administration must immediately come up with a plan to deal with soaring energy bills, labor shortages, inflation and rising interest rates,” she said. “Policy debunking has led to low consumer and business confidence.”
Companies face an anxious wait to find out who will replace Truss. Many business leaders would like to see former prime minister Rishi Sunak succeed Boris Johnson, who has worked closely with him on business support packages during the coronavirus pandemic.
Sunak is considered the safest hand among leadership candidates, due to its ability to maintain new management policies, including tax incentives for investment, that are already popular with some business groups.
Company leaders initially praised Truss’ oath of pro-business and growth leadership, while ignoring warnings about the impact of her low-tax agenda on the economy. in the context of a desire to re-establish relations with Downing Street.
But business confidence has slumped since the summer as companies face new threats from a sharp rise in inflation, and especially from spiraling energy bills and rising interest rates. .
The government’s “small” September budget – most of it since being reversed by new prime minister Jeremy Hunt – directly leading to a drop in confidence and increased costs, according to multiple executives.
Bosses on Thursday said UK businesses have delayed investment decisions because of political uncertainty, which has also eroded confidence among foreign investors.
Tony Danker, CEO of CBI, Britain’s largest business group, said the recent political turmoil had “undermines confidence among people, businesses, markets and global investors in the Older brother. That must end now if we are to avoid further damage to households and businesses.”
He added that Truss’ successor needed to act urgently to restore trust by “providing[ing] a reliable fiscal plan for the medium term as soon as possible, and a plan for the long-term growth of our economy”.
Richard Burge, head of the London Chamber of Commerce and Industry, said it was “shocking that the government has allowed the chaos of freedom to reign in recent weeks, damaging our economy and endangering our lives. jeopardize our standing on the world stage.”
He said Truss’ resignation would “not provide immediate relief” or “miraclely rekindle confidence for many businesses that are doing business in the worst economic environment 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 revenue, according to the Federation of Small Businesses.
FSB President Martin McTague said companies are “calling for an end to the political turmoil and a focus on fixing the economy, supporting small companies through the difficult winter ahead”.
Haviland of the BCC said the government must review the energy support package for businesses by the end of April, as well as address the shortage of skilled workers and devise a strategy to boost exports.
“People run businesses and businesses rely on people. The new administration must understand that the cost of living and the cost of doing business in crises are two sides of the same coin.”
