UK business chiefs want three-year deal before Brexit

British business leaders from companies including BT and Centrica said they wanted a three-year Brexit transitional deal to protect jobs in Britain and Europe.

In a letter organised by the Confederation of British Industry, more than 100 companies employing a total of more than one million people in Britain and the European Union said they needed to make decisions now about investment that will affect jobs in the future.

“Until transitional arrangements can be agreed and trade discussed the risk of ‘no deal’ remains real and has to be planned for, with inevitable consequences for jobs and growth on both sides,” it said.

Brussels has said talks on Britain’s future trading relationship with the EU can only start after the other 27 EU governments are satisfied that “sufficient progress” has been made on the terms of the departure.

Britain is due to leave the union, deal or no deal, in late March 2019. UK Prime Minister Theresa May’s office caused dismay within the business community earlier this month when it asked business leaders to put their name to a letter backing the government’s approach to Brexit. The letter did not materialise.

“Businesses across the EU and UK are clear: Being able to plan for a transition of up to three years that avoids a cliff edge is critical for our collective prosperity,” the letter organised by the country’s leading trade body said.

British firms are also facing uncertainty about consumer demand.

An IHS Markit survey showed UK households are feeling the tightest squeeze on their finances in three years and the Bank of England’s signal that it is getting close to raising interest rates is likely to make things worse.

Its monthly household finance index fell to 42.8 in September from 43.4 in August though above a three-year low of 41.6 seen in July. The amount of cash available to spend continued to fall at one of the steepest rates seen over the past three years, according to the survey.

Last week the Bank of England said it expected to raise interest rates in the coming months if inflation pressure continued to build, surprising many investors.

Reuters