Business leaders around the globe have said the rise of economic nationalism triggered by Brexit, Donald Trump and populist politics poses the greatest threat to their growth.
According to a survey of 1,300 chief executives from some of the world’s biggest companies, carried out by the accountancy company KPMG, British business leaders are notably more pessimistic than their peers.
Two-thirds of UK CEOs said they were most worried about the growing use of protectionism, which includes measures such as tariffs and quotas on imports, compared with just over half of their international counterparts.
Such barriers have the potential to protect jobs in the countries that put up trade barriers, but business leaders argue the benefits are outweighed by higher prices for consumers.
Bill Michael, UK chair at KPMG, said: “If world trade doors continue to close, there will be an inevitable impact on global growth. This persistent retrenchment is of huge concern to the business leaders I speak to.”
The warnings come after China and the US stepped back from a potential trade war that could have had damaging repercussions for the global economy.
Washington agreed to put “on hold” proposed tariffs on Chinese imports, as the two sides said they had reached “a consensus on taking effective measures” to cut the US trade deficit in goods with China.
Financial markets rallied after the statement on Monday, helping to push the FTSE 100 to a record high. However, the prospect of an Italian coalition government forming at odds with the EU establishment may threaten to unsettle stock markets.
Most chief executives in the KPMG survey of 150 UK business leaders and 1,150 from elsewhere around the world said geopolitical risks, regulations and investment in technology would trigger slow growth for their companies over the coming year.
European business leaders have become increasingly pessimistic in recent months, despite some of the progress being made in the Brexit talks. According to a study of chief financial officers by the accountancy company Deloitte, 12% said they were less optimistic about the prospects for their business, up from 11% in the autumn.
Half said they were experiencing a high level of financial and economic uncertainty, while business leaders in the UK had the gloomiest outlook in the survey of 1,652 chief financial officers from across Europe. British companies had the lowest investment intentions of those from any of the 20 EU nations in the study.
Ian Stewart, the chief UK economist at Deloitte, said: “Europe’s recovery saw a slight loss of momentum in the first quarter, with CFO optimism and revenue expectations nudging lower. But outside the UK, businesses are upbeat about spending and hiring.”
