PWC chairman says companies are ‘watching carefully’ ahead of election

● President Trump and vote for Brexit means business not ruling out any result

The global chairman of accountancy giant PWC has warned that uncertainty around tomorrow’s UK general election is weighing on the minds of businesses that are prepared for the unexpected after Brexit and the US presidential vote.

Bob Moritz said businesses would be viewing the General Election very differently had it taken place at the same time last year, before the UK referendum or Donald Trump’s victory.

“Everybody’s watching. They’re probably assuming a certain outcome, but they’re watching carefully because everybody’s been surprised over the last year or so,” Moritz told the Press Association in St Petersburg.

“I think the election is just another needle in the haystack that is tipping the balance... because there is so much uncertainty and there are so many different compounding effects of that uncertainty that these institutions are scenario planning quite a bit,” he said. “So everybody’s going to watch carefully and adjust accordingly.”

The Labour Party could make waves for business after pledging to reverse corporation tax cuts - raising the rate to 26 per cent – and increasing taxes on certain financial securities such as derivative contracts.

However, Moritz said he does not expect client demand for tax advisory services to rise if Labour gains power.

“I don’t see it changing significantly one way or another – there’s enough uncertainty in tax today, irrespective (of the election result) because not only are you dealing with rising tax rates it’s also the play between countries on a worldwide basis.”

More broadly, PWC is seeing clients take part in much more scenario planning to deal with a raft of crises that have gripped the business world in recent years.

“It could be an election one day, it could be natural resources and the price of oil another day, it could be a terrorist attack on the third day, so it’s the combination of all that that’s causing them to scenario plan more so than this particular election.”

While businesses may still expect a Tory majority after Thursday’s election, Moritz added that PWC has been advising clients to look past party politics and make investment plans based on broader economic trends.

“The reality is parties have come and gone for the cycles... the underlying trends irrespective of a party are the ones that are driving growth, driving opportunities.

“It’s the demographics to follow, not so much the party.”