Businesses Preparing to Move R&D Out of U.K. as Brexit Looms
(Bloomberg) -- Over 60 percent of businesses are preparing to move research and development facilities and teams out of the U.K. as they ready for life after Britain leaves the European Union, according to FTI Consulting.
A survey of over 2,000 business leaders in France, Germany, Spain and the U.K. found a decline in confidence that turnover, staff and new business will continue to grow despite Brexit. The share that said they believe it would be better for their firms if Britain remains a part of the EU rose.
While most respondents still expect Britain to reach a trade agreement with the EU, more than three quarters said they are preparing for a no-deal scenario with “contingency planning that could have a major impact on the economy,” it said. Yet fewer firms were making irreversible decisions than had expected to at the end of last year.
“With only six months to go, and a critical European Council meeting this week, business has clearly decided it will not get the clarity or the certainty it needs to enable it to prepare for the longer term,” said John Maloney, head of FTI Consulting’s Brexit taskforce.“The impact on individual businesses could be huge.”
FTI’s report comes after the U.K. issued another batch of papers on its preparations for a no-deal Brexit, including a warning to companies to get mergers done before exit day and a further call to drugmakers to stockpile. Prime Minister Theresa May has yet to nail down an agreement in negotiations with the EU, while a summit this week is being heralded as Brexit’s defining moment to make progress.
Without imports from the EU, a third of the 1.1 million small and medium-sized enterprises with suppliers in the bloc will be unable to operate, Bibby Financial Services said in a separate report Monday. More than half of those firms will struggle to find alternative suppliers out side the EU and 61 percent would see profits fall, the survey of 1,000 companies found.
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