BUSINESSES across Yorkshire and the UK have put investment on hold, freezing recruitment and pay rises as they await the outcome of next week’s General Election,, according to business recovery specialist, Begbies Traynor.

It has warned that business uncertainty about the election result was causing stagnation across all areas of the economy, According to its latest Red Flag Alert, "significant" financial distress levels among businesses fell by only one per cent over the past three months to 14,737 firms .

Levels of more severe "critical" distress increased by five per cent to 177 failing companies compared with the previous quarter.

Julian Pitts, Begbies Traynor Yorkshire managing partner, said: “Concerns over the outcome of the most uncertain election in a generation have led to a state of stagnation across all sectors of the economy. Swathes of businesses in Yorkshire have postponed their growth plans until after the results have been announced.

“With economic forecasters predicting that political uncertainty would result in a fall in consumer confidence and sharp swings in the value of the pound, many business leaders in Yorkshire took the decision at the start of the year to cut back on much needed investment, new hires and pay increases to provide a buffer in the event that trading levels subsided.

“Fortunately these concerns seem to have been overly cautious, as the economic impact of the election has so far been minimal.”

In Yorkshire, the major casualty of tightened consumer budgets remained regional food and beverage manufacturers, many of which supply the major supermarkets. They continued to experience escalating ‘significant’ distress with 129 Yorkshire businesses struggling to make ends meet, compared to 66 at the same stage last year - a 95 per cent increase.