Uncertainty among UK business executives has fallen to its lowest level since before the 2016 Brexit vote, according to research, following Prime Minister Keir Starmer’s resounding election victory.
Deloitte’s quarterly survey of chief financial officers found that 23% of large UK companies expressed high or very high levels of uncertainty, down from 36% in the previous survey and the lowest figure since late 2015.
The report also found increased optimism about the financial outlook, adding to early signs of an upturn in business sentiment following Labour’s victory on 4 July.
“We have seen a significant shift in risk appetite following the general election and the new government’s focus on growth and stability is already boosting business confidence,” said Richard Houston, chief executive of Deloitte UK.
The findings are likely to be welcomed by Rachel Reeves, the Chancellor of the Exchequer, but the Deloitte research also highlights the difficulty she faces in unlocking private sector investment, which is crucial to Labour’s goals for faster economic growth.
When asked about the election result, 21 percent of companies surveyed by Deloitte said they would increase plans for investment, deal-making, and hiring, while 11 percent said they would decrease. More than two-thirds expected little or no change.
The majority of companies surveyed between 9 and 19 July said that cost-cutting was a higher priority than expansion or investment.
According to a separate survey by online job portal Adzuna, the number of vacancies fell to 852,703 in June, the lowest level since March 2021 and down 19.5 percent on the previous year.
Deloitte’s Houston said business leaders want the industrial strategy to be the next government’s top economic priority, a view shared by the manufacturing association Make UK.
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