Brexit has UK businesses wondering what will happen next, though an increasing number are preparing for the possibility of no Brexit deal.
The second Thomson Reuters survey of 150 Chief Financial Officers (CFOs) across the UK and Europe has revealed Brexit is now impacting the strategic planning of 40 percent of respondent businesses. This represents an increase of almost 10 percent since the first survey, which was conducted in July 2017 and released a month later.
The CFO Brexit Survey is conducted quarterly by the Thomson Reuters Tax and Accounting Division and polls companies across industry sectors that generate between USD$100 million and USD$5 billion in revenue annually. It asks what impact Brexit has had, or will have, in the following areas: Company expansion; investment; headcount; relocation; and compliance.
Many results have changed only slightly; at 35 percent, there is almost no change in the number of companies that anticipate decreasing the number of their employees in the UK; the summer the figure was 30 percent. Similarly, there is only a slight increase (from 4 to 9 percent) of those considering relocating their headquarters from the UK as a result of Brexit. Thirty-eight percent of respondnets said they were actively planning for no Brexit deal.
“With no notable change in the number of businesses looking to reduce or relocate UK staff, our results suggest that many businesses are still adopting a ‘wait-and-see’ attitude, but a sizable minority are actively planning for a ‘no deal’ scenario,” said Laurence Kiddle, Managing Director for the EMEA Tax & Accounting business at Thomson Reuters. “This, coupled with a general fall in confidence in the key individuals negotiating Brexit, suggests a general disillusionment with the process and pace of the negotiations.”
In both surveys, respondents were asked to rate their confidence in the Chancellor’s stewardship of the UK economy on a scale from one to 10. Philip Hammond’s score has decreased from 8.6 in the summer to 6.6 in the most recent poll. He is not alone though; respondents were also asked to rate (again out of ten) their confidence in government figures to generate a positive Brexit deal for their business. Prime Minister Theresa May’s score has reduced from 3.4 to 3.2; Foreign Secretary Boris Johnson has reduced from 2.9 to 2.5 and Brexit Secretary David Davis from 3.8 to 3.6.