Business groups have reacted to Prime Minister Liz Truss’s resignation on 20 October – and the backlash has been fairly brutal.
The Confederation of British Industry (CBI) said that the recent few weeks have ‘undermined the confidence of people, businesses and markets in Britain‘ with Tony Danker, Director General of the CBI, commenting: ‘Stability is key. The next Prime Minister will need to act to restore confidence from day one. They will need to deliver a credible fiscal plan for the medium term as soon as possible, and a plan for the long-term growth of our economy.’
Meanwhile, the Federation of Small Businesses (FSB) has called on the government to ‘show it can provide stability and take the necessary steps to secure economic growth in the face of significant recessionary pressures’. Martin McTague, National Chair of the FSB, said: ‘Businesses are crying out for an end to the political turmoil and a focus on remedying the economy, supporting small firms through the hard winter ahead. Whoever becomes Prime Minister must knuckle down, see through the delivery of the energy support package for small businesses – as already approved by Parliament – and the reversal of the hike in national insurance.’
Meanwhile, the British Chambers of Commerce (BCC) warned that the UK now faces ‘even greater uncertainty, just as it stands on the cusp of a recession’. Shevaun Haviland, Director General of the BCC, stated: ‘Flip flopping on policies has led to low consumer and business confidence, with four in ten firms expecting falling profits as companies have seen little sign of a coherent strategy nor stability in government decision making. She goes on to add ‘The challenges that lie ahead of us are building by the day. Two thirds of firms expect to raise their prices and inflation is the top concern. Interest rates are set to climb further in November and energy bills will now rocket again for many in April.’
Industry bosses have also been almost unanimous in their condemnation of recent political turmoil, which they say has caused investment in the UK to stall as economists predict a long recession – indeed US investment banking giant Goldman Sachs downgraded its outlook for Britain forecasting the UK economy would shrink by 1% next year, down from its previous estimate for a 0.4% contraction.
Time will tell if the new Prime Minister – to be appointed on Monday – will be able to regain the trust of business and the markets.