FTSE chairs’ support for coalition is ‘waning’

By ERIKKA ASKELAND
Published on 30/07/2012 00:00

TWO-THIRDS of FTSE 100 chairmen think the eurozone will not fracture in the next 12 months but their confidence in the UK government’s economic policy is waning, according to a survey.

Although 65 per cent of chairmen expect the eurozone to remain intact over the next year, they are still taking the threat of disintegration very seriously, with 87 per cent factoring a potential collapse into their planning as a critical risk to their business, according to the Boardroom Pulse report.

Despite extensive planning, there remains a great deal of trepidation over a potential break-up, with one respondent suggesting that “it is far from obvious what we can actually do to mitigate the risk”.

The survey also indicates a drop in approval levels for the coalition government’s economic policy when compared to similar questionnaire from January 2011. Ipsos Mori’s Captains of Industry survey showed that 89 per cent of British business leaders thought the UK government’s policies would improve economic conditions.

The more recent study found a 50-50 split among FTSE 100 chairmen on whether the UK government is striking the right balance between driving growth and tackling the budget deficit. Many respondents believe that the coalition should do more to stimulate growth.

One FTSE chairman suggested that “the government needs to use private financial initiatives to fund capital projects and immediately implement the new financing package for lending to small firms”.

Another recommended that “regulation and taxes need to be cut and UK government spending refocused”.