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Third of large EU companies sees damage from Brexit talks - Deloitte

Published 15/11/2016, 00:07
© Reuters. British students hold UK and European Union flags in front of the European Parliament in Brussels

LONDON (Reuters) - Just over one in three large European companies expects its business to be damaged by the talks which will lead to Britain leaving the European Union, a survey showed on Tuesday.

British Prime Minister Theresa May intends to start two years of exit talks early next year, but has given few details on how she will balance businesses' desire to keep easy access to EU markets with public disquiet about high immigration.

"Concerns around regulatory change are the biggest concern, but curbs on workforce mobility and export opportunities are also cited as risks to European businesses," said David Sproul, chief executive of Deloitte UK, which published the survey.

The accounting firm surveyed 1,148 chief financial officers in the EU, Russia, Turkey, Norway and Switzerland, who are responsible for investment decisions at large firms.

Overall, 37 percent of CFOs said their business was likely to be damaged by the Brexit talks. Another 50 percent thought they would be unaffected. Only 5 percent saw gains.

Negative sentiment was highest in Britain, where large firms generally opposed Brexit and 65 percent now said they expected to suffer damage. Around half of companies in the Netherlands, Ireland and Portugal also expected damage.

Last month, Deloitte said 40 percent of CFOs expected to cut investment over the next three years, down from 58 percent just after the referendum, while 46 percent expected hiring to slow, down from 66 percent before.

Broader concerns about the outlook were little changed since the previous survey six months ago. Two-thirds of businesses across Europe said they faced a high level of economic and financial uncertainty.

Barely a quarter of businesses thought now was a good time to take on more risk, though two-thirds expected revenue to rise over the coming year.

© Reuters. British students hold UK and European Union flags in front of the European Parliament in Brussels

"Businesses (are) becoming more accustomed to uncertainty and more used to managing it," said Deloitte UK's chief economist, Ian Stewart.

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