British businesses have relaxed their investment projects as confidence in the UK economy stumbles.
Expectations among businesses for investment expansion stay well below the numbers in 2014 and 2015, according to the Institute of Chartered Accountants in England and Wales Business Confidence Monitor.
The membership body’s study found that present levels of investment revealed no signs of going up, along with staff development funds, which were increasing at a much slower speed than revenues.
The shortage of investment was blamed on the confidence among businesses that had slipped back into negative territory, countering the gains made in the second quarter. The index dropped from 6.7 in the second quarter to minus 8 in the third quarter, similar to levels at the start of 2017.
The snap election, the threat of a hung parliament and the slow progress of discussions with the EU mean firms are now using a more careful strategy, the report revealed. Matthew Rideout, director of business at the ICAEW, stated that the fall back was “not unexpected”.
“The industrial strategy has been lost in the void, coupled with no clear signal towards post-Brexit policy,” he added.
“As a result, businesses cannot see through this haze of uncertainty and are struggling to look further than the end of the next quarter in terms of their decision making.”
He encouraged businesses to invest in talent and new products to position themselves to benefit from new trading opportunities and announced the Government should make transitional agreements for Brexit clear so businesses could start preparing.
“They need to be planning now and cannot wait until early 2019 to find out,” he added.