“Complete breakdown “of relations between the UK and the European Union foresees, David Wright, former deputy director general for financial policy in the European Commission. “It’s not a bit neutral, or a bit negative, but for the EU and the UK it’s potentially extremely disruptive. There’s a risk of a complete breakdown,” Mr Wright commented in an interview with Business Insider.
The former director of financial policy who had worked for more than 30 years in the EU commission is worried mainly by the complexity of the issues that need to be resolved and, according to him, that is “absolutely impossible” to happen in two years’ time. “Politics in the EU are not black and white like in the UK,” he added.
Meanwhile, the uncertainty about the UK’s future post Brexit, is creating more issues that need to be resolved. Just in the last 2 days, two reports by consultancy firm KPMG and PwC organization, revealed that one in three manufacturing firms is planning to move some operations out of the UK. That is mainly driven by the fear of the UK government failing to secure a future trade deal with the EU. “Our research ﬁnds that companies are considering a number of measures to plan for this potentially radical change. For example, a third are considering relocating aspects of their plant or operations to another country in order to boost productivity or reduce costs, with China and India the most attractive destinations for relocation. There is also a slight but notable increase in consideration of moving elements of the supply chain away from the UK,” the KPMG report concluded.
A bit more positive with their report are PwC. According to their “Family Business Survey,” despite the recent slowdown in growth, UK’s family businesses remain bullish about the future. The spectre of Brexit has not impacted their pre-referendum growth forecasts, with 93% anticipating to grow over the next five years, with more than nine in ten (94%) confident of growing their core business in existing markets. And, although 38% of companies expressed fears as to the impact of Brexit on their business, fewer than half have taken any measures to mitigate the potential impact that leaving the EU may have on their business activities.”
These two reports will certainly affect future negotiations, specially now with the Government under pressure trying to help struggling companies, and reconsidering plans to increase business rates in the next few years.