Business shaken by Tory fight, says IoD
Wednesday 05 July 1995
The damage to business confidence caused by the uproar within the Conservative Party is "unlikely to be slight", the Institute of Directors warned yesterday. Tim Melville-Ross, director general of the right-wing employers' organisation, said that business would now expect the result of the leadership contest to herald a return to political stability.
Political uncertainty had damaged business confidence even before John Major announced the Conservative Party leadership contest, according to the IoD's latest survey of members.
The survey, conducted two days before Mr Major's announcement, shows that last month the balance of those more optimistic over those more pessimistic about the outlook for the economy dropped to zero - the lowest since the ERM debacle in September 1992. "Uncertainty will undoubtedly have increased considerably in the interim," Mr Melville-Ross said.
Those businessmen and women who were still optimistic about the economy cited evidence of growth as the reason. The pessimists blamed both the political situation and the slower pace of growth. The balance feeling optimistic about their own company's prospects fell to 38 per cent from 48 per cent in the April survey. Respondents feeling cheerful about their own company said the main reason was a development within the firm, such as new or better quality products. Among the less optimistic the main reason was the level of sales or orders.
Even though four out of five directors said their company was doing very or fairly well, job prospects were bleaker.
The proportion of respondents expecting to add jobs in the next six months fell to 39 per cent, from 48 per cent in April. There was a small drop in investment plans for the next six months. Pay settlements remained modest, with more than a third of firms making awards of 2-3 per cent and another quarter awarding 3-4 per cent rises. But nearly half of all pay awards this year have been higher than last and only 13 per cent lower.
The IoD said the survey, which covers mainly small businesses, confirmed that the economy was slowing down. However, it issued a warning about the danger of inflation, saying the renewed pressure on sterling since the announcement of the leadership election could add further to inflationary pressure.
Mr Melville-Ross said: "We see no need for a rise in interest rates on economic grounds at the moment, although the continuing weakness of sterling is a cause for concern and any further significant depreciation would add to inflationary pressures in manufacturing."
- 1 BBC told new political editor must be 'impartial' with Nick Robinson reportedly stepping down
- 2 Number of young homeless people in Britain is 'more than three times the official figures'
- 3 Humans of New York image of crying gay teen receives best response yet from Ellen DeGeneres
- 4 The map showing the most dangerous tourist destinations in Europe, according to the Foreign Office
- 5 Swedish minister gives strongest case yet on why EU should stop turning away asylum seekers
BBC told new political editor must be 'impartial' with Nick Robinson reportedly stepping down
Isis propaganda video shows 25 Syrian soldiers executed by teenage militants in Palmyra
Number of young homeless people in Britain is 'more than three times the official figures'
Humans of New York image of crying gay teen receives best response yet from Ellen DeGeneres
The map showing the most dangerous tourist destinations in Europe, according to the Foreign Office
More Britons believe that multiculturalism makes the country worse - not better, says poll
Nathan Collier: Montana man inspired by same-sex marriage ruling requests right to wed two wives
Greece crisis: IMF was pushed around by Angela Merkel and Nicholas Sarkozy – and now it is being humiliated
Forget little green men – aliens will look like humans, says Cambridge University evolution expert
Girl, 7, stares down hate preacher at Ohio festival with pro-LGBT rainbow flag gesture
Osborne to cap family benefits at £23,000 – announced ahead of his post-election Budget
iJobs Money & Business
£15000 - £17000 per annum: Recruitment Genius: This company offers a range of ...
£15000 - £16000 per annum: Recruitment Genius: Customer Service Advisors are r...
£20000 - £25000 per annum + OTE £45K: SThree: SThree were established in 1986....
£40000 - £60000 per annum: Recruitment Genius: A Compliance Manager is require...