Post-election policy shakeup seen as biggest threat to business by bosses

Finance chiefs rank risk of policy change and referendum on EU membership as biggest threats to UK business

Top company bosses fear that policy shakeups following next month's election could put a fragile economic recovery at risk, according to a survey that found companies were already cutting back their spending plans.

With less than four weeks until polling day and tight opinion polls prompting warnings about risks to the pound, stocks and bonds from a hung parliament, a survey of chief financial officers found company bosses were worried the election risks upsetting the current "benign policy environment".

The UK economic outlook has improved since the start of the year but for CFOs this seems to have been offset by mounting political risk. Rising perceptions of uncertainty have dampened corporate risk appetite and fed through to a softening of investment intentions," said Stewart.

"Risk appetite appears to have decoupled from its usual drivers, the economic outlook and equity market performance. This provides an ominous reminder that the business recovery is not assured."

This is shaping up to be the most uncertain election in living memory, with even professional pollsters struggling to make sense of what political configuration may result in its aftermath. Whichever of the two main parties is the larger after this election, neither is expected to come close to a majority ... In short, if the polls stay where they are, it's easy to see why there may be no good market outcomes of this general election."

While there is plenty of scope for wheeling and dealing it is likely that the government that emerges will not be able to pursue a referendum on Brexit or abandon major reductions in the annual public deficit," he said.

"Voters, business and markets all seem uncertain what to be uncertain about."