By Daniel Hunter
The Institute of Director’s (IoD) latest quarterly economic polling has revealed that economic confidence is slipping. The Policy Voice poll of 1,135 IoD members saw 32% predict that economic growth in 2013 would be lower than the Office for Budget Responsibility (OBR) forecast of 0.6%.
Asked whether they expected UK economic performance in 2013 to exceed the Office for Budget Responsibility (OBR) forecast of 0.6%, the panel were pessimistic.
Only 1.4% thought growth would be much higher than predicted, while 26.6% thought growth would be a little higher. 31% expect growth to be at the levels forecast by the OBR. 32% think growth will be a little lower than the prediction and 4% expect growth to be a lot lower.
The Policy Voice panel believe that George Osborne’s latest Budget is positive news for the UK economy. While only 3.5% believe it is very positive, 52% think it will be somewhat positive. A further 31.5% believe it will be neither positive nor negative. 9% think it will be somewhat negative and only 3% believe it will be very negative.
Meanwhile, respondents believe the Budget will have an overall positive impact on their own companies. 3% believe the Budget was very positive for their organisation, and 45% believe it was somewhat positive. 43% think it was neither positive nor negative. Meanwhile, only 5.5% think the Budget was somewhat negative, and a mere 1.6% think it was very negative.
A majority of business leaders surveyed want to see an end to ring-fencing within public spending. We asked the panel whether they agree or disagree that “the Government is right to protect the health, schools and international aid budgets from possible spending reductions”. 4.7% strongly agree, while 29.4% agree — a total of 34.1% who support ring-fencing. 39.5% disagree, and 12.8% strongly disagree — a total of 52.3%.
"The economy is still in a precarious position, with business confidence a key factor in its future direction. It is troubling that confidence is currently subdued," Graeme Leach, Chief Economist at the Institute of Directors, said.
"The Budget made a positive impression on business leaders, so it is now a question of ensuring every area of Government policy is geared to help the private sector grow. There is a clear appetite among businesses for the Chancellor to abandon the policy of ring-fencing some budgets against any cuts at all - it is time for all spending to be examined in full to find ways to save money."
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