Financial chiefs express new doubts over UK economy

Friday, 09/01/2015

As the UK enters another general election year, and rumours of a complete collapse of the Eurozone become ever more insistent, the country's chief financial officers are warning that the UK economy could be at risk once more. Bad news for people already struggling to save money, or pay back instalment and payday loans.

It's not all doom and gloom, however, as a number of notable CFOs actually think the UK's fundamental economic core is in good health. Of those economists asked by professional consultancy firm Deloitte to offer their views on the state of the economy, an overwhelming percentage (88% to be exact) described the country as a “good” and “excellent” location for companies to conduct business.

The main source of worry, it seems, is the upcoming general election, which some commentators see as a genuine threat to businesses as we enter 2015. The atmosphere of civil unrest and political uncertainty has brought with it a “big shift in thinking” that some commentators believe could further destabilise our already bruised economy.

“Going into each year, from 2008 to 2013, finance chiefs’ main concern was the state of the UK economy. Now the risks are seen as lying elsewhere,” said Deloitte's chief economist, Ian Stewart.

Deloitte's stance echoes the findings of a recent internet poll conducted by the Financial Times. The census, which reached out to top economists, found that the majority of people believe that the biggest threat to business and consumer confidence is the tumultuous political landscape.

Of those polled, an overwhelming majority felt it was unlikely that either of the UK's two main political parties could secure enough votes to win the election outright, leaving leadership of the country in the hands of a coalition government once again.

This uncertainty over the general election, coupled with the lack of economic strength and continued deflation in the Eurozone, not to mention the UK's threat to withdraw its EU membership, could have serious repercussions for the UK's economy, they warn.

Although some policy makers and analysts remain upbeat, recent figures from Lloyds Bank show confidence in businesses has slipped over the last six months, due in large part to a lack of global growth.

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