Business optimism has “flatlined” following the general election a study suggests.
Business advisers BDO LLP said companies were also waiting for details on how the UK will leave the European Union.
Peter Hemington, of BDO LLP, said: “UK business is hoping for a Boris bounce. However, we’ve seen in the past that post-election changes in optimism take a while to feed through, even where the result is as decisive as this.
“Added to this, British businesses are still waiting to see the UK’s EU exit deal.
“However, it’s difficult to find a business person who isn’t hugely relieved to see the back of last year’s political chaos. From experience, this change of mood should feed its way through into a more upbeat approach to hiring and investing as we go through the year.”
BDO said its research indicated that the number of job vacancies across the UK fell in 2019 compared to previous years.
Boris Johnson’s insistence that the transition period must end at the end of the year despite the EU and experts warning that around 600 separate treaties with the 27 states of the EU cannot be renegotiated properly in that tight timeframe has created another no-deal Brexit cliff edge at the end of the year. Many UK businesses are postponing investment.
The economic cost of Brexit has already hit £130 billion with a further £70 billion set to be added by the end of this year.
Research by Bloomberg Economics shows the British economy is now 3 per cent smaller than it could have been had the relationship with the EU been maintained.
Business investment in particular has been held back, and annualized economic growth has halved to 1 per cent from 2 per cent.
Dan Hanson, UK economist for Bloomberg Economics, puts the total cost of Brexit by the end of 2020 at £200 billion as uncertainty continues to take a toll on companies and consumers.
Despite the imminent threat of a no-deal split being removed, Boris Johnson still has to negotiate new trading arrangements that creates another potential cliff edge at the end of the year.
And despite tax cuts and increased borrowing for investment being on the Conservative’s agenda, none of the ground lost since 2016 is likely to be made up.
