While businesses are left in the air with the implications of Britain leaving the EU, more than half pull out investment in the UK
The possibility of the UK leaving the EU raises multiple questions and has undoubtedly caused a lot of uncertainty for firms that do business in the UK. If prime minister Theresa May has her way, by next year Britain will leave the single market and the customs union. Even though May assures a “free and frictionless deal,” European companies are reassessing their long-term investments in Britain, fearful of how Brexit might affect trade across the bloc.
Two years since the referendum, nearly half of 800 business executives surveyed across six EU countries by Baker McKenzie, a law firm, said their businesses had reduced investment in the UK since the Brexit vote, reported by Reuters. The survey said that three out of four bosses insisted that Brussels and Britain should strike a better trade deal and develop a smoother relationship before March 2019.
Encouraginly, 96% of those surveyed said trade was more important than teaching London a lesson for Brexit while 45% were in favour of a customs union.
However, investment is not the only thing that Britain will lose after leaving the EU. On June 21, Airbus, an aircraft company based in France, issued a warning which said that if Britain was to depart from the EU without a transition agreement, it would lead to “severe disruption and interruption of UK production” hence putting more than 14,000 jobs at risk.
And the aerospace giant, isn’t the only company issuing a warning like that. Just a day after Airbus’ announcment, BMW, automobile company, which employs 8,000 people in the UK, hinted that it could axe UK operations due to lack of clarity.
Commenting on the uncertainty surrounding the divorce bill, Anahita Thoms, a trade partner at Baker & McKenzie, said: “It’s very clear that, especially German companies, think that Brexit is bad for business.”
As London and Brussels squabble over the terms of their divorce, there is little agreement on how a no deal Brexit will affect the country’s economy. The question remains whether will it cause recession or financial freedom.