The majority of British businesses are preparing to launch contingency plans before Christmas as hopes of a Brexit deal fade.
A survey of 236 businesses for the Confederation of British Industry (CBI) found that many will make “damaging” moves which will include cutting jobs and relocating work overseas.
The survey focused on companies employing fewer than 500 people and it found that 82% will start to implement their contingency plans by December if the Brexit process does not get any clearer.
The news comes as fears grow that the UK could leave the European Union in March without a deal, resulting in tariffs on exports, border checks and travel restrictions.
CBI director general Carolyn Fairbairn said the situation was “urgent”, adding: “The speed of negotiations is being outpaced by the reality firms are facing on the ground.
“Unless a withdrawal agreement is locked down by December, firms will press the button on their contingency plans.
“Jobs will be lost and supply chains moved.
“The knock-on effect for the UK economy would be significant: living standards would be affected and less money would be available for vital public services including schools, hospitals and housing.”
Ms Fairbairn said the uncertainty was “draining investment” from the UK, adding: “From a multinational plastics manufacturer which has cancelled a £7m investment, to a fashion house shelving £50m plans for a new UK factory, these are grave losses to our economy.
“Many firms won’t publicise these decisions, yet their impact will show in lower GDP years down the line.”
According to the CBI, 80% of companies said Brexit had already had a negative impact on their investment decisions, more than double the 36% that said the same a year ago.
Two-thirds said Brexit had affected how attractive the UK was to investors. One in four said it had no impact.
Last week’s summit between prime minister Theresa May and Europe’s leaders made little progress towards a deal and a second summit in November has been called off.
The next meeting is scheduled for December but, even if a deal is reached, there is no guarantee that parliament will approve it.
A spokesman for the Department for Exiting the European Union said: “We are working hard to deliver a deal that works for businesses and remain confident of a positive outcome.
“In the unlikely event we leave the EU without a deal, we have issued over 100 technical notices to help businesses make informed plans and preparations.
“We have engaged extensively with businesses and industry bodies from all sectors of the economy throughout the exit process and will continue to do so.”
Source: Yahoo News UK