With more than 40 percent of large companies scaling back, according to a new survey, since the vote to leave the European Union U.K. businesses have delayed or canceled investments worth 65.5 billion pounds ($82 billion).
According to the study published Monday by the Centre for Economics and Business Research and Hitachi Capital U.K., executives have been reluctant to follow through on spending plans because of a plunge in the pound and a lack of clarity over the U.K.’s future relationship with the EU.
“Everyone talks about uncertainty, but what does that mean?” Hitachi Capital U.K. Chief Executive Officer Robert Gordon said. “Once you start putting a number to it, it becomes quite scary.”
Uncertainty about what a new deal with the EU will look like is in part responsible for the nervousness among executives. The U.K. could face a billion-pound hit from losing access to the bloc’s free-trade agreements with more than 50 countries across the world, pro-EU group Open Britain said.
It said, citing a separate report by CEBR that while exporters would be undermined by new tariffs in other nations, importers of everything from transport equipment and chemicals to food and textiles would have an additional 1.2 billion in costs. It “would be far more difficult to negotiate bilateral agreements of comparable scope” in a hard Brexit and the U.K. would have to renegotiate deals with each country individually.
Open Britain’s Peter Mandelson, a former EU trade commissioner said that higher costs “would be footed by businesses and passed on to consumers with higher prices in the shops.”
About one-third of U.K. companies delayed or abandoned spending plans in the wake of the June referendum, the CEBR investment report showed. Small firms were less likely to postpone or delay as they were less exposed to currency moves and foreign investment. But they collectively accounted for 81 percent of the total investment lost.
The access to the EU’s single market, the falling pound and policy changes were cite dot be the major concerns for big companies, defined as those that employ more than 250 people.
Gordon urged the government to provide more clarity about its Brexit plans.
“We haven’t got time to put all these different spins on it, and debate it endlessly in Parliament for years before we begin negotiating,” Gordon said in a phone interview. “Confidence is very easy to lose, but it’s a bit harder to gain.”
The latest Japanese-owned company to weigh in on Britain’s EU exit is Hitachi Capital U.K., a subsidiary of Japan’s Hitachi Capital Corp. that provides financing to small and medium-size businesses. Improvement of Brexit communications or putting inward investment at risk were called for by Japanese government officials and business leaders who have urged Prime Minister Theresa May’s government on these issues.
“Leave campaigners talk about all the free-trade deals we can sign outside the EU, but do not appreciate the value of those we already have,” Mandelson said. “The EU is a leader in global free trade and we should seek to preserve its benefits, as far as is possible.”
(Source:www.bloomerg.com)
According to the study published Monday by the Centre for Economics and Business Research and Hitachi Capital U.K., executives have been reluctant to follow through on spending plans because of a plunge in the pound and a lack of clarity over the U.K.’s future relationship with the EU.
“Everyone talks about uncertainty, but what does that mean?” Hitachi Capital U.K. Chief Executive Officer Robert Gordon said. “Once you start putting a number to it, it becomes quite scary.”
Uncertainty about what a new deal with the EU will look like is in part responsible for the nervousness among executives. The U.K. could face a billion-pound hit from losing access to the bloc’s free-trade agreements with more than 50 countries across the world, pro-EU group Open Britain said.
It said, citing a separate report by CEBR that while exporters would be undermined by new tariffs in other nations, importers of everything from transport equipment and chemicals to food and textiles would have an additional 1.2 billion in costs. It “would be far more difficult to negotiate bilateral agreements of comparable scope” in a hard Brexit and the U.K. would have to renegotiate deals with each country individually.
Open Britain’s Peter Mandelson, a former EU trade commissioner said that higher costs “would be footed by businesses and passed on to consumers with higher prices in the shops.”
About one-third of U.K. companies delayed or abandoned spending plans in the wake of the June referendum, the CEBR investment report showed. Small firms were less likely to postpone or delay as they were less exposed to currency moves and foreign investment. But they collectively accounted for 81 percent of the total investment lost.
The access to the EU’s single market, the falling pound and policy changes were cite dot be the major concerns for big companies, defined as those that employ more than 250 people.
Gordon urged the government to provide more clarity about its Brexit plans.
“We haven’t got time to put all these different spins on it, and debate it endlessly in Parliament for years before we begin negotiating,” Gordon said in a phone interview. “Confidence is very easy to lose, but it’s a bit harder to gain.”
The latest Japanese-owned company to weigh in on Britain’s EU exit is Hitachi Capital U.K., a subsidiary of Japan’s Hitachi Capital Corp. that provides financing to small and medium-size businesses. Improvement of Brexit communications or putting inward investment at risk were called for by Japanese government officials and business leaders who have urged Prime Minister Theresa May’s government on these issues.
“Leave campaigners talk about all the free-trade deals we can sign outside the EU, but do not appreciate the value of those we already have,” Mandelson said. “The EU is a leader in global free trade and we should seek to preserve its benefits, as far as is possible.”
(Source:www.bloomerg.com)