The political turmoil stemming from the UK general election has sunk the confidence of British businesses, an industry body has warned.

The Institute of Directors (IoD) reported confidence has suffered a "dramatic drop", following an election which has left the Conservative Party eights seats short of an overall majority and needing support from Northern Ireland's Democratic Unionist Party to govern.

The snap-poll of 700 members highlighted businesses fear the government lacks a clear plan to solve the current political stalemate.

However, the IoD added the survey also found there was no appetite for a second election this year, suggesting going to the polls again before Christmas would create further problems for the UK economy.

"The needs of business and discussion of the economy were largely absent from the [general election] campaign, but this crash in confidence shows how urgently that must change in the new government," said Stephen Martin, IoD director-general.

Members of the IoD stressed the government should now focus on securing a new trade deal with the European Union, as well as clarify the status of EU citizens currently living in Britain.

Brexit negotiations are scheduled to begin next week as Britain kicks off the two-year process that will take it out of the 28-country bloc by March 2019. However, that timeline now looks optimistic after May's unexpected electoral debacle last week.

The result of the election is understood to have substantially weakened May's position, both within her own party and in the eyes of Brussels, while simultaneously emboldening Tory MPs who favoured a so-called "soft Brexit" approach.

Paul Drechsler, president of the Confederation of British Industry, echoed the IoD's thoughts, suggesting Britain needed to swiftly recognise the rights of EU workers in the UK.

"To succeed, the UK needs to build the best partnership seen anywhere in the world between its business and the new government, not just on Brexit but on other issues fundamental to the foundations of our economy," he said.