London — Four-fifths of UK companies have cut or withheld investment because of the uncertainty caused by Brexit, Britain’s biggest business lobby said.
About 58% of businesses have made plans to cut jobs, adjust supply chains, relocate production and services or stockpile products if no clarity emerges soon on Britain’s future relationship with the European Union after Brexit, according to the Confederation of British Industry. In a survey of 236 companies, it found that 41% have already implemented some contingency plans.
As time ticks down to Britain’s March departure from the world’s biggest trading bloc, talks remain deadlocked in Brussels. That has weighed on corporate confidence in the British economy, with companies clamoring to find out what the future trading conditions with the EU will be, so they can make adjustments to their operations. Absent progress, they are preparing for a worst-case scenario of Britain tumbling out of the bloc without a deal.
“As long as ‘no deal’ remains a possibility, the effect is corrosive for the UK economy, jobs and communities,” said CBI director-general Carolyn Fairbairn. “The situation is now urgent. The speed of negotiations is being outpaced by the reality firms are facing on the ground.”
The CBI said that it is already too late for 19% of companies to stop implementing further economically damaging contingency plans. It will be too late for another 15% this month, another 24% next month and an additional 24% in December.
“Unless a Withdrawal Agreement is locked down by December, firms will press the button on their contingency plans,” Fairbairn said. “Jobs will be lost and supply chains moved.”
Bloomberg
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