Britain's descent into political crisis just days before Brexit talks begin has reportedly sapped confidence among business leaders, already grappling with the fallout from last summer's vote to leave the European Union
The failure by Prime Minister Theresa May to win a parliamentary majority in last week's election has pushed the world's fifth largest economy towards a level of political uncertainty not seen since the 1970s.
May called the election to secure a mandate for her vision of a "hard Brexit" -- driving down migration by taking Britain out of the single market and the customs union.
Instead, she got a hung parliament in which she failed to win a majority over the other four parties, and business leaders demanding a re-think.
A survey by the Institute of Directors (IoD) found only 20% of its nearly 700 members were now optimistic about the British economy over the next 12 months, compared with 57% who were quite or very pessimistic.
The IoD survey, taken after the election, found a negative swing of 34 points in confidence in the economy from its previous survey in May.
The collapse in confidence, which follows a short-term drop after last year's Brexit vote, coincides with a slowdown in the wider economy that has taken hold since the start of this year, as rising inflation pushes up the price of goods.
Figures from credit card giant Visa (NYSE: V) showed British consumers turned more cautious even before the shock election result, with households cutting their spending for the first time in nearly four years last month.
The Confederation of British Industry warned there was now a risk businesses might cut back on investment which has largely held up since last year's Brexit vote.
And the trade group that represents manufacturers said its members were having to navigate the most uncertain political territory in Britain for decades.
Both groups called on the May government to reconsider its approach to Brexit, saying the country needed tariff-free access to the single market and a steady flow of migrant workers.
