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You can find the current article at its original source at https://www.theguardian.com/business/live/2017/jun/12/business-optimism-plunges-political-uncertainty-markets-ftse-sterling-business-live
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| Business optimism plunges as UK political uncertainty grips markets – business live | Business optimism plunges as UK political uncertainty grips markets – business live |
| (35 minutes later) | |
| 8.41am BST | |
| 08:41 | |
| Europe’s stock markets are a sea of red this morning, as investors digest the tumble in UK business confidence in the last couple of days. | |
| Shares are being pulled down by worries over UK politics, and the selloff in the tech sector. | |
| Connor Campbell of SpreadEx says there isn’t much optimism in the City this morning. | |
| Falling around half a percent the UK index found itself back below the 7500 mark, if only just, as the Institute of Directors warned that its members were feeling pretty damn pessimistic about the state of the UK economy in the next 12 months. | |
| The pound, meanwhile, neither continued last week’s decline nor substantially recovered any of those election-losses, opening 0.1% higher against the dollar and flat against the euro. | |
| 8.30am BST | |
| 08:30 | |
| The FTSE 250 index, which is more UK-focused than the FTSE 100, has dropped by 50 points (or 0.25%) in early trading to 19,719. | |
| 8.24am BST | |
| 08:24 | |
| The IoD’s gloomy warning on business confidence is helping to keep a lid on the pound this morning. | |
| Sterling is hovering around $1.274, close to Friday night’s close. It tumbled by over two cents when the election exit polls came out on Thursday night. | |
| Craig Erlam, senior market analyst at OANDA, warns that the pound is vulnerable to political uncertainty, as prime minister May tries to cling onto power. | |
| With Theresa May scrambling to repair the self-inflicted damage suffered as a result of the election, there remains a huge amount of uncertainty around her position and with only a week to go before Brexit talks with the EU begin, I feel there may be a few more twists to come yet. | |
| May has not delivered the strong and stable government she wanted and instead looks weak and vulnerable. I find it hard to see how she recovers from this. | |
| Mike van Dulken of Accendo Markets agrees, saying: | |
| Sentiment remains dented by politics following the UK’s hung parliament and shift in the balance of UK political power. | |
| 8.14am BST | |
| 08:14 | |
| European stock markets have opened in the red, with the FTSE 100 losing 27 points (or 0.4%). | |
| Technology stocks are the biggest fallers, following a selloff on Wall Street on Friday night. | |
| European open @BloombergTV pic.twitter.com/1sbIVxHVpF | |
| Updated | |
| at 8.18am BST | |
| 8.13am BST | |
| 08:13 | |
| Manish Singh of CrossBridge Capital, an investment advisory firm, isn’t surprised that business confidence has fallen since the UK election. | |
| He says many business leaders are now pondering the prospect of Jeremy Corbyn becoming prime minister, after he smashed expectations and gained 32 seats. | |
| Speaking on Bloomberg TV, Singh says: | |
| If you are a business, you really need to start thinking ‘what is in the Labour manifesto?’.... | |
| It will have some businesses worrying about Mr Corbyn’s policies. | |
| Labour’s manifesto included raising income tax on those earning over £80,00 per year, increasing corporation tax, and renationalising the water companies, as well as free childcare, ending the freeze on welfare benefits and abolishing tuition fees. | |
| Singh says political instability can deter businesses from investing, especially when the Brexit talks are also hanging over them. | |
| But he also agrees that younger voters are right too feel aggrieved, as yound people in Europe will be poorer than previous generations. | |
| 7.48am BST | 7.48am BST |
| 07:48 | 07:48 |
| The agenda: UK business optimism plunges after hung parliament | The agenda: UK business optimism plunges after hung parliament |
| Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business. | Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business. |
| European stock markets are set to fall this morning, as evidence piles up that Britain’s mounting political uncertainty is hurting the economy. | European stock markets are set to fall this morning, as evidence piles up that Britain’s mounting political uncertainty is hurting the economy. |
| The Institute of Directors have issued a stark warning that business optimism has plunged after Theresa May lost her House of Commons majority last week. | The Institute of Directors have issued a stark warning that business optimism has plunged after Theresa May lost her House of Commons majority last week. |
| A new survey of IoD members found that 57% are either quite pessimistic or very pessimistic about the UK economy over the next 12 months. Just a fifth described themselves as optimistic -- which gives a ‘net confidence’ score of minus 37. | A new survey of IoD members found that 57% are either quite pessimistic or very pessimistic about the UK economy over the next 12 months. Just a fifth described themselves as optimistic -- which gives a ‘net confidence’ score of minus 37. |
| That’s a serious deterioration compared to the previous month, when 34% were optimistic and 37% pessimistic. | That’s a serious deterioration compared to the previous month, when 34% were optimistic and 37% pessimistic. |
| The poll, conducted over the weekend, found that many business leaders are alarmed by the prospect of a hung parliament, just as the Brexit negotiations begin. | The poll, conducted over the weekend, found that many business leaders are alarmed by the prospect of a hung parliament, just as the Brexit negotiations begin. |
| Stephen Martin, director general of the Institute of Directors, says British politicians need to urgently refocus on the state of the economy. | Stephen Martin, director general of the Institute of Directors, says British politicians need to urgently refocus on the state of the economy. |
| “It is hard to overstate what a dramatic impact the current political uncertainty is having on business leaders, and the consequences could – if not addressed immediately – be disastrous for the UK economy. | “It is hard to overstate what a dramatic impact the current political uncertainty is having on business leaders, and the consequences could – if not addressed immediately – be disastrous for the UK economy. |
| The needs of business and discussion of the economy were largely absent from the campaign, but this crash in confidence shows how urgently that must change in the new government. | The needs of business and discussion of the economy were largely absent from the campaign, but this crash in confidence shows how urgently that must change in the new government. |
| This chart might focus a few minds in Westminster: | This chart might focus a few minds in Westminster: |
| The IoD’s survey isn’t the only cause for concern this morning. | The IoD’s survey isn’t the only cause for concern this morning. |
| Visa have reported that household spending fell last month, for the first time in almost four years. | Visa have reported that household spending fell last month, for the first time in almost four years. |
| It highlights how consumers are being squeezed by rising inflation and political uncertainty, and cutting back on non-essential items. | It highlights how consumers are being squeezed by rising inflation and political uncertainty, and cutting back on non-essential items. |
| As things stand this morning, May’s grip on Number 10 is looking precarious, with insiders saying she cannot lead the Conservative Party into another election. | As things stand this morning, May’s grip on Number 10 is looking precarious, with insiders saying she cannot lead the Conservative Party into another election. |
| Yesterday she was savaged as a “dead woman walking’ by former chancellor George Osborne (who seems to be enjoying his new career in journalism). | Yesterday she was savaged as a “dead woman walking’ by former chancellor George Osborne (who seems to be enjoying his new career in journalism). |
| But the game isn’t over, yet. Later today May will appeal to her MPs for support, in an attempt to remain as prime minister. | But the game isn’t over, yet. Later today May will appeal to her MPs for support, in an attempt to remain as prime minister. |
| Our political editor Heather Stewart explains: | Our political editor Heather Stewart explains: |
| The prime minister is expected to signal to her parliamentary colleagues that she will run her government in a more collegiate, less controlling way, after sacrificing her two closest advisers, Fiona Hill and Nick Timothy. | The prime minister is expected to signal to her parliamentary colleagues that she will run her government in a more collegiate, less controlling way, after sacrificing her two closest advisers, Fiona Hill and Nick Timothy. |
| With many backbenchers blaming May for the party’s poor performance at the polls, one senior Conservative said she would have to give a “barnstorming” performance at the meeting of the party’s 1922 committee of MPs to hold on to her job. | With many backbenchers blaming May for the party’s poor performance at the polls, one senior Conservative said she would have to give a “barnstorming” performance at the meeting of the party’s 1922 committee of MPs to hold on to her job. |
| Spread-betting firm IG expect the main European markets to fall by up to 0.5% this morning. | Spread-betting firm IG expect the main European markets to fall by up to 0.5% this morning. |
| Our European opening calls:$FTSE 7494 -0.44%$DAX 12769 -0.37%$CAC 5291 -0.17%$IBEX 10917 -0.56%$MIB 21040 -0.39% | Our European opening calls:$FTSE 7494 -0.44%$DAX 12769 -0.37%$CAC 5291 -0.17%$IBEX 10917 -0.56%$MIB 21040 -0.39% |
| While Britain is gripped by May’s crisis-of-her-own-making, France’s Emmanuel Macron is showing us how to lead a country. | While Britain is gripped by May’s crisis-of-her-own-making, France’s Emmanuel Macron is showing us how to lead a country. |
| The French president’s En Marche party is on track for a landslide win in parliamentary elections, giving him enough muscle to start pushing through economic reforms. | The French president’s En Marche party is on track for a landslide win in parliamentary elections, giving him enough muscle to start pushing through economic reforms. |
| Final results of Sunday's stunning 1st-round French legislative voteEn Marche 32%LR 22%FN 13.5%FI 11%PS 9.5%Huge Macron majority ahead pic.twitter.com/GunW39igqo | Final results of Sunday's stunning 1st-round French legislative voteEn Marche 32%LR 22%FN 13.5%FI 11%PS 9.5%Huge Macron majority ahead pic.twitter.com/GunW39igqo |
| There’s very little in the economic calendar today, alas. | There’s very little in the economic calendar today, alas. |
| Updated | Updated |
| at 8.02am BST | at 8.02am BST |