Bosses 'tearing their hair out' over PM confidence vote

Business groups have voiced their dismay after Tory MPs triggered a confidence vote in Theresa May, with one saying bosses were "tearing their hair out" at latest developments.

The Institute of Directors (IoD) said politicians had delivered even greater uncertainty in the run-up to Brexit while the British Chambers of Commerce (BCC (Shenzhen: 002455.SZ - news) ) said firms felt "utter dismay".

Meanwhile, engine maker Rolls-Royce said it would continue contingency plans - including stockpiling parts and shifting one technical part of its operation to Germany - until there was greater certainty about Brexit.

At the same time, analysis from experts at GlobalData predicted that a hard Brexit would wipe £2.3bn off the UK non-food retail market - coming on the same day that Dixons Carphone (Frankfurt: CWB.F - news) and Superdry both pointed to consumer uncertainty as they delivered gloomy trading updates.

Financial markets were initially little affected by the latest developments, however, with the pound having already fallen to a 20-month low on Tuesday as signs of a challenge to Mrs May mounted - and it in fact recovered some ground on Wednesday.

The FTSE 100 was trading more than 1% higher.

IoD director general Stephen Martin said: "The last thing businesses needed today was even more uncertainty - and yet politics has managed to deliver on that once again.

"Many business leaders, along with the rest of the country, will be tearing their hair out at the state of Westminster politics at the moment.

"Cool heads must prevail. Ensuring economic stability and certainty in the months ahead should be priority number one for all politicians."

Adam Marshall, director general of the BCC, said: "At one of the most pivotal moments for the UK economy in decades, it is unacceptable that Westminster politicians have chosen to focus on themselves, rather than on the needs of the country.

"The utter dismay amongst businesses watching events in Westminster cannot be exaggerated.

"Our firms are worried, investors around the world are baffled and disappointed, and markets are showing serious strain as this political saga goes on and on.

"History will not be kind to those who prioritise political advantage over people's livelihoods.

"Businesses need politicians, regardless of party or views on Brexit, to understand that their high-stakes gambles have real-world consequences of the highest order."

Stephen Phipson, chief executive of manufacturers' organisation EEF, said: "Business was already staring down the barrel of substantial uncertainty with manufacturing activity grinding to a halt and investment being cut back.

"A leadership challenge now is extremely unhelpful and the last thing that Industry wants to see."

Rolls-Royce said that in the wake of the Commons vote on the Prime Minister's Brexit vote being delayed, it would "continue to implement our contingency plans until we are certain that a deal and transition period had been agreed".

The company has already - like a number of other businesses - begun to stockpile parts in case there is a no-deal Brexit which could cause delays at borders affecting its supply chain.

It is also pressing ahead with plans to transfer design approval for large aircraft engines to Germany, in what it describes as a "precautionary and reversible technical" action which will not result in the relocation of any jobs.

Karla Rendle, senior retail analyst at GlobalData, said: "Retailers are coming to terms with the fact that there is a real need to plan for a hard Brexit scenario, with an end to free trade and no customs union between the UK and the EU.

"Increased tariffs, delays at ports and borders and a sharp fall in the pound, pushing up the cost of imports, would all have a negative impact."

Businesses have been increasingly vocal in recent weeks about the potential impact of a no-deal with many coming out in support of Mrs May's Brexit plan - though a number of prominent Leave supporters have been strongly critical.