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IoD: Business outlook 'stuck in the doldrums'

Lily Canter
·2-min read
The IoD is calling on government to bring in tax reliefs for SMEs. Credit: Getty.
The IoD is calling on government to bring in tax reliefs for SMEs. Photo: Getty

UK business leaders' plans to invest and hire have stalled in their recovery according to new figures from the Institute of Directors (IoD).

Chief economist Tej Perikh said business outlook appeared to be “stuck in the doldrums” and called on government to step in.

Company directors’ employment expectations for the year ahead remain negative, falling from -6 to -11 in September and intended investment has also failed to improve, dipping further to -10.

Although both of these measures are up from their record lows in May they still remain below normal.

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The recent improvement in directors' outlook for their own firms has slowed according to the IoD's autumn confidence tracker although their confidence in the wider economy continues to gradually lift.

Confidence varied between different regions, with those in Yorkshire, the East Midlands, and the North of England less negative than those in London or Scotland.

Aside from coronavirus and wider economic conditions, the top concern of business leaders surveyed was uncertainty over trade with the EU. This was followed by broadband problems and skills gaps, suggestive of the impact of the rise in remote working.

The IoD has called on the government to spur job creation by cutting employment taxes, driving up business investment through tax relief incentives, and extending its suspension of wrongful trading rules.

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Parikh said: “The current restrictions put a lid on demand for a number of sectors, but local lockdowns and the prospect of stricter measures down the road are putting even more businesses in a bind.

“With hiring intentions bleak and redundancies expected in sectors such as hospitality, the treasury should step in to support job creation. Lowering employment costs will be crucial to help firms that are doing well to pick up the slack."

He urged the government to give small- and medium-sized businesses (SMEs) tax reliefs to spend on new technology and adaptations to help raise business spending.

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