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The Actuary The magazine of the Institute & Faculty of Actuaries

One in five UK businesses need Brexit transition deal to operate as usual

Thousands of businesses across the UK face an uncertain future, with one in five unable to operate as usual after March 2019 without a Brexit transition deal agreed.

Businesses want certainty ©Shutterstock
Businesses want Brexit certainty ©Shutterstock

That is according to a survey of 280 CEOs and CFOs by KPMG, which finds that 68% would sacrifice a comprehensive future deal for a less ambitious one, provided they receive legal certainty on a transition by April.

“The CEOs we’re speaking to are often willing to accept a more modest deal in exchange for certainty so they can make investment decisions now,” KPMG UK head of Brexit, James Stewart, said.

“Whether business leaders see Brexit as a burden or a great British opportunity, most regard certainty around transition as one of the fundamental building blocks for growth.”

Despite concerns, it was found that 76% of businesses are confident the UK will secure a long-term Brexit deal with the EU before March 2019, with just 16% saying the opposite.

In addition, 43% of firms believe they could actually gain a competitive advantage without a deal, while a third think it would have a negative impact and involve job losses.

CEOs across the East of England, the Midlands and Yorkshire were found to be some of the most confident that Brexit will be good for business, whereas those in London, the South West and South East are most pessimistic.

The survey respondents said increased costs were the biggest challenge posed by Brexit, followed by disruption and uncertainty, loss of trade, and access to talent.

The greatest opportunities cited include entrepreneurship, new export opportunities, better economic conditions, and increased investment.

“Many people talk about Brexit as if it’s exclusively a negative force to be mitigated, but many companies, particularly medium-sized challenger brands, see disruption as an opportunity,” Stewart continued.

“For them Brexit is a chance to unleash their entrepreneurial spirit, to open up new export opportunities or realise a competitive advantage on their larger competitors.

“Some organisations need to fix the downsides of Brexit, others are looking to exploit the upsides – but the smartest are doing a combination of both.”

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