UK 2015 Elections Biggest Risk to Corporations

Political uncertainty ahead of May’s general election and the weakening eurozone economy are hitting confidence across British businesses.

Two surveys on Monday show that firms began the new year fretting about domestic political upheaval and the possibility that geopolitical tensions could escalate in 2015.

The general election is seen as the biggest threat to business this year, according to Deloitte’s latest quarterly poll of finance chiefs at Britain’s biggest companies. The prospect of a hung parliament, in which smaller parties hold the balance of power, is making firms more wary.

“The decline in support for the three main parties, and the rise in support for others, means the risk of political instability and the possibility of more radical policy changes is greater than before,” said Ian Stewart, Deloitte’s chief economist.

“In the past, CFOs had been more concerned with increased financial and economic uncertainty, but they’re now latching onto the more uncertain domestic political landscape.”

Analysts say the election is the hardest to predict in generations, given the surge in support for Ukip, the Scottish National party and the Greens. A hung parliament is possible, raising the prospect of a second election before the end of the year.

Chief finance officers are also more concerned than three months ago about the weak eurozone economy, which is teetering on the brink of deflation, and the possibility of Britain leaving the EU.

via The Guardian

Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.