LONDON (The Guardian) - Business confidence in the UK has collapsed after a month that has seen supply bottlenecks, rising energy prices, fuel shortages and looming tax increases combine to stifle growth.
In its latest health check on the economy, the Institute of Directors said sentiment had “fallen off a cliff” in September, adding to fears that Britain was on course for a dose of 1970s-style stagflation.
The warnings from the IoD came as people queued to fill up on garage forecourts and road traffic fell in the last week. The online clothes retailer Boohoo said its profit margins were being squeezed by higher shipping costs and the need to increase pay for staff in its warehouses.
The IoD said the sharp fall in business confidence from +22 points to –1 point in September meant a return to the pessimism of February, when the economy was constrained by lockdown restrictions.
Kitty Ussher, the IoD’s chief economist, said: “The business environment has deteriorated dramatically in recent weeks. Following a period of optimism in the early summer, people running small and medium-sized businesses across the UK are now far less certain about the overall economic situation and the IoD Directors’ Economic Confidence Index fell off a cliff in September.