UK firms shelve investment and hiring plans in May, IoD says

FILE PHOTO: People walk through the Canary Wharf financial district of London, Britain, December 7, 2018. REUTERS/Simon Dawson/File Photo

LONDON (Reuters) - British company directors’ investment and hiring intentions sank to their lowest in more than three years last month, even as their broader confidence edged up slightly from a record low struck last month when COVID-19 restrictions were greatest.

The Institute of Directors said its monthly sentiment survey showed business leaders’ confidence in the economy rose to -60 in May from -67 in April, which was the lowest reading since the survey began in July 2016.

But both investment and hiring intentions sank to their lowest in the survey’s history.

“It’s too early to say we’ve turned the corner,” IoD chief economist Tej Parikh said. “Revenue isn’t expected to pick up, which means investment and hiring plans are very much on hold.”

The IoD figures are broadly in line with other business surveys which have shown a small pick-up in activity since April, when coronavirus restrictions were heaviest.

Official due data on Friday is likely to show economic output in April was more than a fifth lower than the year before, according to a Reuters poll of economist.

Restrictions on businesses in England are steadily being lifted, though for some sectors such as hospitality there is no clear timetable for when operations can return to normal.

The IoD said the government should give tax breaks and grants to companies that needed to revamp their business models.

Reporting by David Milliken, editing by Andy Bruce