BOE Action Not Enough as U.K. Business Pleads for Fiscal Boost

(Bloomberg) -- Business leaders urged U.K. Chancellor of the Exchequer Philip Hammond to deliver a “bumper” fiscal stimulus, saying the Bank of England can do little to revive confidence on its own.

The Institute of Directors said its latest survey found increasing pessimism about the economy in the wake of the surprise decision in June to leave the European Union, with marginally more firms now expecting to cut investment than increase it over the next 12 months.

The findings come amid near universal expectations that the BOE will lower interest rates on Thursday for the first time since 2009. The IoD said 60 percent of its members doubted a cut would make a “significant difference.”

Click here for a video preview of the BOE decision.

“The U.K. badly needs an injection of confidence to prevent general concerns turning into lots of individual decisions to stop hiring and investing,” said IoD Director General Simon Walker. “We need the government to produce a bumper, feel-good Autumn Statement. Increasing tax breaks for investment and cutting corporation tax would be a very good start.”

Hammond will outline his fiscal plans in his end-of-year statement, and has indicated he's prepared to ease the budget-cutting plans of his predecessor, George Osborne. Prime Minister Theresa May's pledge to abandon Osborne's 2020 budget-surplus goal was widely endorsed in the IoD survey, which questioned 1,106 members between July 14 and July 28.

To contact the reporter on this story: Andrew Atkinson in London at a.atkinson@bloomberg.net. To contact the editors responsible for this story: Fergal O'Brien at fobrien@bloomberg.net, Lucy Meakin