The business leaders’ association said it had surveyed 700 of its members in the wake of the election and observed a 34-point swing to the negative in its UK economy confidence measures compared to its last survey in May.
Only 20% of surveyed members are now optimistic about the UK over the next 12 months with 57% “quite” or “very” optimistic.
The IoD described the confidence fall as a “plunge”.
It said 65% of its surveyed members believed the election result was a “significant concern” for the UK economy, while 27% said it was a “slight concern”.
In other words, 92% of members believed the election result was a concern.
The IoD added that most of its members did not believe a further election this year would be welcome.
IoD director general Stephen Martin said: “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.
“It was disheartening that the only reference the Prime Minister made to prosperity in her Downing Street statement was to emphasise the need to share it, rather than create it in the first place.”
