Business and City leaders call for reassurance

City of London skyline Image copyright DANIEL LEAL-OLIVAS

Politicians must act fast to reassure businesses in the wake of the election result, according to business leaders.

The result is a "serious moment for the UK economy", the CBI business lobby group said, and called for politicians to form a "functioning government".

British Chamber of Commerce bosses also called for a "workable administration" to build confidence.

The Institute of Directors demanded a focus on preparing for Brexit talks and to move away from political "rhetoric".

And the manufacturing organisation, the EEF, said it wanted a "careful rethink" on Britain's Brexit negotiation strategy.

All business groups were keen to stress that uncertainty is the worst outcome for its members, who are struggling to come to terms with what shape the new hung parliament will take.

Individual companies and chief executives have been more muted, but Aston Martin said the uncertainly could lead to a fall in investment in the UK by the luxury car maker.

Aston Martin chief executive Andy Palmer said: "We cannot stress strongly enough the need for rapid and decisive policy direction to ensure that business can continue to invest for the long term growth and ensure the global competitiveness of the British economy,"

The firm has recently invested heavily in a new factory in St Athan, Wales.

'Act responsibly'

Organisations representing thousands of UK businesses echoed Mr Palmer's message.

CBI director general Carolyn Fairbairn warned: "The priority must be for politicians to get their house in order and form a functioning government, reassure the markets and protect our resilient economy.

"Politicians must act responsibly, putting the interests of the country first and showing the world that the UK remains a safe destination for business. It's time to put the economy back to the top of the agenda.

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"For the next government, the need and opportunity to deliver an open, competitive and fair post-Brexit economy that works for everyone across all our nations and regions has never been more important."

Markets reacted to the news of the hung parliament by pushing the value of the pound lower, although the FTSE 100 share index opened higher.

'Further uncertainty'

Martin GIlbert, chief executive of Aberdeen Asset Management told the BBC's Today programme: "I don't think any of us know what to make of the result.

"The City will be hoping for a slightly softer tone and possibly a softer tone from Europe now that the really the negotiators don't have a mandate to negotiate a hard Brexit."

Dr Adam Marshall, director general of the British Chambers of Commerce (BCC), agreed that a new government must be formed quickly.

"After two long years of elections, referenda and wider uncertainty, many businesses were doing their best to ignore the noise of politics - up until today," he said.

"The electorate's split decision generates further uncertainty for business communities, who are already grappling with currency fluctuations, rising costs, and the potential impacts of Brexit.

"The formation of a workable administration that can give voters and businesses confidence around economic management must be the immediate priority."

Brexit focus

Stephen Martin, director general of the Institute of Directors, said businesses had been "thrown into political limbo".

"The majority of British business will be waiting to see whether a stable government can be formed in short order.

"If the Conservatives govern as a minority, they must recognise that they have not earned a mandate to implement their manifesto in full.

"Now is the time to move on from the rhetoric of the election campaign and focus on preparing for Brexit talks."

Terry Scuoler, chief executive of EEF, the manufacturers' organisation, said: "The Brexit negotiating strategy requires a careful rethink.

"Industry should be at the table, alongside whatever administration is formed, to help ensure we have the right negotiating position, which is something that's been sadly lacking until now.

"The main parties have championed an industrial strategy for Britain and this must not be a casualty of the political turmoil."

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