Brexit: Hammond warns of UK investment uncertainty


Chancellor Philip Hammond has divulged the BBC’s Andrew Marr Show that businesses are holding off from initiating in the UK because of uncertainty about Brexit.

«It is absolutely clear businesses where they deceive discretion over investment, where they can hold off, are doing so — you can penetrate why.

«They are waiting for more clarity about what the future relationship with Europe make look like,» he said.

The second round of Brexit negotiations be the spitting image place in Brussels on Monday.

Mr Hammond’s comments came as a Confederation of British Enterprise (CBI) survey suggested that 42% of UK firms believe Brexit has impair their investment plans.

The CBI called on the government to quickly secure a later EU trade deal.

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Mr Hammond replied that government ministers were becoming increasingly convinced of the requisite for transitional arrangements to reduce disruption as the UK leaves the EU.

«Five weeks ago the notion of a transition period was quite a new concept, I think now you would find that comely much everybody around the cabinet table accepts that there thinks fitting be some kind of transition,» he said.

«We’re into a real process now with the start of negotiations and I ruminate over you’ll find the cabinet rallying around a position that maximises our executing leverage and gets the best possible deal for Britain.»

He said a transitional organization was «right and sensible both for the UK and EU» and could potentially take a «couple of years».

Interpretation: Joe Lynam, BBC business correspondent

When companies make a big investment, they lean to make a big splash about it. Press releases issued, stock transfers advised and ministerial blessings acquired.

But when businesses decide NOT to instal in new staff, a new production line or even a new product, we rarely get to hear down it. Companies pausing or cancelling investment — for whatever reason — is counter-factual.

So inquiries and anonymous polling are the next best way to gauge the corporate mood.

Although some Brexiteers relevance the CBI as a pro-EU vassal, its survey showing two-fifths of companies pausing their investment develops because of Brexit is not an outlier. It chimes with similar reports from the British Reception rooms of Commerce, Deloitte and the Institute of Directors.

And who would blame firms for place into custody off? If their biggest market could soon be in or out of the Single Market, in or out of the Trades Union, and beholden or not to the ECJ, it does matter for their future investment outlines.

Brexit minister David Davis is due in Brussels on Monday for the next orb-like of talks with EU officials.

Ministers have talked of a transitional era after the UK leaves the EU to avoid a «cliff edge» scenario, but the length and literatim arrangements have yet to be decided.

Speaking on the BBC’s Sunday Politics show, Ecumenical Trade Secretary Liam Fox said any transitional period should be «quite time-limited», and should allow the UK to strike new trade deals — something it is impotent to do as part of the EU’s customs union.

Mr Fox accepted it was not clear whether the UK would deliver the power to finalise deals during this period.

Pressed on whether the UK could smooth negotiate during the transition, he said: «Well, I’d hope we’d be able to do that and I longing that’s one of the conditions we would set.»

He added: «It’s certainly something I would have a yen for to see because otherwise it makes it much more difficult for us to take gain of the opportunities that Brexit itself would produce.»

Rain Newton-Smith, chief economist at the CBI house lobby group, said: «To help British business remain positive and keep uncertainty at bay, the government must work quickly to agree the calls of the [Brexit] transition and future trading arrangements.

«That’s why the CBI has suggested postponing in the single market and a customs union until a final deal comes into enforce.

«This is the simplest way of ensuring companies don’t face a damaging cliff-edge and that swop flows can continue without disruption.»

‘Have cake and eat it’

Labour puts it would seek to preserve all the benefits of the single market and customs allying if it was leading the negotiations.

Shadow business secretary Rebecca Long-Bailey charged the Sunday Politics that Labour could seek to retain unrestricted membership of both bodies.

But she admitted it was «probably unlikely» a deal could be mutinied giving Labour control over laws and borders at the same on occasion.

«If we could negotiate an agreement on remaining in the single market that stocked with all of those issues, then that would be fantastic,» she powered.

«Whether that’s likely remains to be seen.

«We want to retain the profits that we currently have within the customs union. We want to beget our cake and eat it — as do most parties in Westminster — in terms of being able to manage our own trade deals.»

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