UK business uncertainty hits lowest since Brexit

Uncertainty among British business leaders has dropped to its lowest level since before the 2016 Brexit vote, following Prime Minister Keir Starmer’s landslide election victory.

Deloitte’s quarterly survey of chief financial officers found that only 23 per cent of large British companies reported high or very high uncertainty, down from 36 per cent in the previous survey and the lowest level since late 2015.

The survey also indicated rising optimism about financial prospects, with Richard Houston, CEO of Deloitte UK, noting a “significant shift in risk appetite” due to the new government’s focus on growth and stability. However, Finance Minister Rachel Reeves faces the challenge of unlocking private-sector investment for Labour’s economic growth goals.

Following the election, 21 per cent of companies surveyed said it would boost investment, deal-making, and hiring plans, while 11 per cent said it would detract. Most companies, however, continue to prioritise cost reduction over expansion.

Meanwhile, job vacancies fell to 852,703 in June, the lowest since March 2021 and a 19.5 per cent drop from a year ago, according to Adzuna.

The manufacturing sector, as highlighted by Make UK, stressed the need for a long-term industrial strategy after Britain fell to 12th in global manufacturing output in 2022, down from 8th in 2021.

“These trends reinforce the need for the UK to react with a long-term industrial strategy,” said Verity Davidge, director of policy at Make UK, criticising the previous government’s inconsistent industrial strategies.