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Business adopts ‘wait and see’ approach to Brexit, says survey

Most businesses in the EU have yet to change their plans due to Brexit, according to a survey by Thomson Reuters.21 Aug 2017

70% of respondents said Brexit has yet to affect their strategic planning, and 43% said they are just watching the process rather than taking action yet.

26% of financial services organisations and 29% of both retail and manufacturing firms said that they are scenario planning for different outcomes of the negotiations, while 20% of technology companies and 17% of energy companies are investigating moving functions from the UK, Thomson Reuters said.   

"The results suggest a relatively muted response from business so far - not the kneejerk reaction that some expected," said Laurence Kiddle, Thomson Reuters' managing director for EMEA tax and accounting.

"Concern for the future trade deal between the UK and the EU has understandably caused some companies to hold off from expansion; and we will continue to see decision deferral until more detail becomes clear.  It is obvious that the business implications of Brexit are beginning to emerge from the mist of rhetoric and speculation," he said.

Guy Lougher of Pinsent Masons, the law firm behind Out-Law.com said: "It’s a surprisingly small proportion of organisations that are scenario planning for different outcomes of the negotiations. I would have expected a higher proportion to be actively scenario planning given the importance of being prepared for the range of potential outcomes that may arise from Brexit. After all, scenario planning does not automatically mean that a business will take premature or precipitous action, it simply means that the business has sought to identify how it would be affected by Brexit."

Sectors differed in their post-Brexit staffing plans. In retail, 60% of respondents expect to cut staff numbers, compared to 47% of energy firms, 23% in financial services and 22% in the technology sector.

Overall, 40% of respondents expect no change, and 34% expect to decrease staff numbers.  

Plans to relocate outside the UK also varied by sector, with 39% of manufacturers considering a move compared to 25% in retail, 19% in financial services and 16% in energy.

Over 30% of the financial services sector said leaving the EU/EEA passporting regime is their greatest concern, while 31% of retailers said that they were most concerned about depreciation of the pound. 

Respondents also ranked their confidence in politicians. International trade secretary Liam Fox earns the lowest score at 3.15 out of 10, prime minister Theresa May followed at 3.47, while foreign secretary Boris Johnson came in at 3.89 and David Davies, Brexit secretary at 3.84.

Chancellor Philip Hammond received an average score of 7.9 and the governor of the Bank of England topped the poll at 8.6.