Written by: Keith Tully
Published: 10th March 2020
Confidence in the prospects for the UK economy have slumped significantly among business bosses in recent days as the spread of coronavirus continues to create huge problems for countries and companies worldwide.
According to the Institute of Directors (IoD), confidence among business leaders has slumped to its lowest level since September 2019.
The downward trend in terms of optimism among company leaders follows a notable uptick in confidence following December’s general election and the clarity it provided on the issue of Brexit.
The IoD has suggested that companies will need to be resilient and agile as they respond to the coronavirus outbreak in the coming weeks but has said it fears there will be a significant impact on businesses across the UK economy.
“Businesses large and small are already responding with agility, with many already taking sensible mitigating actions at this stage,” said Tej Parikh, the IoD’s chief economist.
“However, with the prospect of orders drying up and staff in quarantine, some firms will be looking at a potential cashflow crunch, and confidence in the economy has taken a knock.”
Principally, the message from the IoD to government is that it should continue to provide “timely and accurate guidance” to businesses as they attempt to deal with and overcome the challenges that coronavirus presents.
But the institute also wants to see policymakers ready to provide support to companies that find themselves faced with financial difficulties as a result of coronavirus and the practical issues that arise from its spread.
“Government must be at the ready to take swift action to help cash-strapped businesses bridge this challenging period,” said Mr Parikh.
“The upcoming Budget also provides an opportune moment to lower business costs and support investment to amplify the post-outbreak recovery.”
The IoD has said that the government should consider a whole range of measures that might help struggling businesses in the coming weeks and months, including giving companies the option of spreading out their tax payments and extending the availability of government-backed business loans.
It’s also being suggested that the government should be looking at ways to encourage large companies to help and support smaller businesses within their supply chains.
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