London - Brexit
has already damaged businesses even before Prime Minister Theresa May triggers
the start of Britain’s withdrawal from the European Union, according to a
survey of the country’s largest companies.
More than half -
58 percent - of top executives at Britain’s biggest firms said the vote to quit
the bloc has had a negative impact on their businesses, the Ipsos MORI
“Captains of Industry” poll found. Two-thirds of the chief executives, chairmen
and directors interviewed for the survey said they believed the business
situation would worsen in the next 12 months.
“Business in
this country is already feeling the pain of the economic upheaval of leaving
the EU,” said Ben Page, CEO of Ipsos MORI. “According to respondents there is
no sign that this is likely to ease this year.”
The research,
conducted between September and December 2016, involved interviews with 114
chief executives, chairmen, managing directors and others from the FTSE 500
companies. It revealed the extent of business leaders’ underlying concerns
over Brexit, despite positive economic data since the referendum vote last
June.
The results
could embolden lawmakers as they scrutinize the prime minister’s plan for
Brexit negotiations in Parliament this week. May is facing a rebellion from
Conservative members of Parliament who fear she will deny them a vote on her
final Brexit deal until it is too late to negotiate better terms.
Pound drop
More than two
thirds of respondents to the Ipsos Mori said they have responded to the
referendum result, with actions including moving business outside the UK and looking
at currency moves. The sharp drop in the exchange rate, while helping to
boost the FTSE-100 share index, is squeezing companies’ margins by pushing up
import costs.
The British
Chambers of Commerce said Monday that a majority of firms expect their costs to
increase over the coming year and plan to increase prices in response. Sterling
has fallen 16 percent since the Brexit referendum in June, and nearly as many
exporters said the low pound was damaging them as those who said it was
helpful.
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The government’s
skill in negotiating the final agreement with the EU will be key to mitigating
the impact of leaving the bloc, according to the Ipsos Mori survey. Half of
those interviewed were not confident in May’s ability to get the best deal
possible.
Skilled workers
Movement of
workers was a key concern of those who took part in the study. When asked to
state their priorities for the Brexit negotiations, 54 percent cited access to
skilled labour. Almost half - 47 percent - called for securing free trade and
access to the EU single market, with so-called passporting rights for financial
services named by 16 percent.
Consulting firm
Mercer on Monday warned that gaps in Britain’s labour market will worsen as
Brexit reduces the number of foreign workers coming to the UK. Migration is
also proving contentious with May’s Conservative Party. Some senior members are
unhappy about her stance on migrants’ rights, calling on her to make a
unilateral promise to EU nationals living and working in the UK that they will
not be thrown out of the country after Brexit.
Despite ongoing
uncertainty, the majority of business leaders - 96 percent - were confident
their company can adapt to life outside the EU. Over a five-year period,
almost one-third said they thought their business would start to feel the positive
effects of leaving the EU. “Businesses are also ready to adapt in order to
survive, and thrive,” Page said.