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UK firms, waiting for Brexit, turn more gloomy about economy: survey

[LONDON] British businesses have turned gloomier about the economy as the country's political crisis deepens, bucking an improvement in sentiment earlier this year, according to a survey published by an employers group on Friday.

Confidence in the economy fell to -28 per cent in the period between May 22 and June 5, down from -19 per cent in April and the first decline registered in 2019, the survey conducted by the Institute of Directors (IoD) showed.

The survey of 893 firms coincided with the announcement by Theresa May on May 24 that she would stand down as prime minister.

Since then, the two candidates to replace her have said they are prepared to take Britain out of the European Union without a transition deal, if necessary.

"Dealing with political uncertainty is part and parcel of leading a business, but this has been taken to extremes over recent years," Tej Parikh, the IoD's chief economist said.

"With the nature of Brexit still ambiguous and another shake-up of key government personnel in motion, many businesses have been holding back on investing in their staff, operations and technology to the detriment of UK productivity growth."

The IoD's confidence balance is derived from the difference in the number of firms saying that they are confident or pessimistic about the economic outlook.