Four-fifths of U.K. companies have cut or withheld investment because of the uncertainty caused by Brexit, Britain’s biggest business lobby said.
Some 58 percent 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 percent 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’s 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’re 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 U.K. 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’s already too late for 19 percent of companies to stop implementing further economically damaging contingency plans. It’ll be too late for another 15 percent this month, another 24 percent next month and an additional 24 percent 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.”