With Prime Minister Theresa May's Brexit plans up in the air, the world of business looks on disconcerted—banks especially are close to their point-of-no-return.
The head of the country's main business lobby group warned on Wednesday that the uncertainty around Brexit—now more than ever—looms over every aspect of corporate Britain. It affects hiring, construction and investment decisions across the country.
European Union citizens will leave the country, and companies will shift jobs and investments abroad if May doesn't chart a clear direction for the country soon, Confederation of British Industry President Paul Drechsler will say in a speech at the City of London Corporation, according to emailed extracts.
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"Every day, companies are having to plan for the worst while hoping for the best. They are making choices that will determine new jobs, new plants and new investments in the years ahead. Businesses will press snooze for as long as they can—but the alarm will go off," Drechsler will say. Financial firms will start to make their "no turning back" decisions from January.
Time is ticking down for May to make progress in Brexit talks with her counterparts from the other 27 EU members. She wants the talks to move onto discussing the future trade relationship from the current divorce terms, but missed an October goal to secure that.
December was meant to be it—and on Monday she looked close until her carefully laid plan imploded when a Northern Irish ally dug in and said the compromise she had in mind for resolving the problem of the post-Brexit border with Ireland was not acceptable.
Next week leaders descend on Brussels. It was then that May was meant to get the sign-off from them that enough had been agreed in terms of three issues—money owed, rights of citizens and the Irish border—to allow negotiations to shift to trade and a transition period for businesses to adapt to the new reality. That deadline is now slipping.
No Deal?
CBI survey data show that some 10% of companies have started implementing their plans for a "no-deal scenario" on Brexit, a proportion that will rise to 60% by March.
That makes May's task more urgent if she's to keep jobs from leaving the country. She's seeking a transition deal that will involve little change for businesses for two years after Britain's scheduled departure from the bloc in March 2019.
"In the immediate term, business needs to know the details of any transition deal: Rome is burning on that issue," Drechsler said. "There's no time to waste."
In a swipe at Brexit supporters who are urging the government to walk away from the negotiations, Drechsler will say that "careless talk will cost jobs."
"We can't enter into negotiations that affect the future of millions of people and then leave at the first sign of trouble," he'll say. "It would be an act of gross irresponsibility to walk away."
From: Bloomberg News
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