More than 100 businesses have signed a letter to the Brexit negotiators David Davis and Michel Barnier asking for a transition period of up to three years to avoid a cliff edge for business.
The firms are responsible for over 500,000 jobs in the UK and 600,000 in the EU, and say that both sides should be "pragmatic and determined" in the next round of negotiations in order to achieve "substantive progress".
This would involve giving certainty on the rights of citizens, and enable the discussion of a transitional deal this month, as well as trade talks by the end of the year.
"Until transitional arrangements can be agreed and trade discussed, the risk of 'no deal' remains real and has to be planned for, with inevitable consequences for jobs and growth on both sides," the letter says.
"Our shared interests vastly outweigh our differences, and we stand ready to help in any way we can to secure a successful outcome for the people and communities of the UK and the EU."
The group of firms, including AON plc and Zurich Insurance, added that a new economic partnership based on the principles of barrier-free trade was needed, and that uncertainty was delaying business decisions.
This comes after a study by Lloyds Banking Group and London First found that 40% of UK-based businesses believe a transition period will enable them to make investment and recruitment arrangements currently put on hold.
The research involved a survey of over 1000 firms with annual turnovers above £1m, finding 54% have delayed such decisions, revised their supply chains, or faced reduced demand, as a result of the Brexit vote.
Some 21% believe a transition agreement needs to be in place by the end of the year, while a further 22% believe the deadline should be June 2018.
In addition, most want an arrangement that covers all the elements of the existing EU relationship, including freedom of goods, services, capital and talent, a common set of tariffs and EU legal arrangements.
"It's clear that a transition period is better for business than no deal," London First chief executive, Jasmine Whitbread, said. "Companies need to be able to see ahead to invest in and hire for the future, we can't afford to wait much longer."
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