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Abu Dhabi, UAETuesday 20 November 2018

Most firms preparing to move operations abroad post-Brexit

More than 75 per cent making contingency plans 'that could have a major impact on the economy', survey finds

Prime Minister Theresa May's negotiations not giving businesses much optimism, survey says. AFP
Prime Minister Theresa May's negotiations not giving businesses much optimism, survey says. AFP

More than 60 per cent of businesses are preparing to move research and development facilities and teams out of the United Kingdom as they ready for life after Britain leaves the European Union, according to FTI Consulting.

A survey of more than 2,000 business leaders in France, Germany, Spain and the UK found a decline in confidence that turnover, staff and new business will continue to grow despite Brexit. The share of those who believe it would be better for their companies if Britain remains a part of the EU rose.

While most respondents still expect Britain to reach a trade agreement with the EU, more than three quarters said they are preparing for a no-deal scenario with “contingency planning that could have a major impact on the economy”, it said.

“With only six months to go, and a critical European Council meeting this week, business has clearly decided it will not get the clarity or the certainty it needs to enable it to prepare for the longer term,” said John Maloney, head of FTI Consulting’s Brexit taskforce.“The impact on individual businesses could be huge.”

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FTI’s report comes after the UK issued another batch of papers on its preparations for a no-deal Brexit, including a warning to companies to get mergers done before exit day and a further call to drug makers to stockpile. Prime Minister Theresa May has yet to nail down an agreement in negotiations with the EU, while a summit this week is being heralded as Brexit’s defining moment to make progress.

Without imports from the EU, a third of the 1.1 million small and medium-sized enterprises with suppliers in the bloc will be unable to operate, Bibby Financial Services said in a separate report on Monday. More than half of those firms will struggle to find alternative suppliers out side the EU and 61 per cent would see profits fall, the survey of 1,000 companies found.