Thought leadership

The leader of the UK’s biggest business lobby said the government accepts the country is in a “new era” following the defeat of its Brexit proposal. John Allan, president of the CBI, was speaking on the BBC after a conference call hosted by the chancellor.

Mr Allan said he was reassured that the government would delay Brexit to avoid leaving the EU without a negotiated deal. Business has warned a “no-deal” Brexit is a threat to jobs and growth.

Mr Allan said it “wasn’t absolutely crystal clear” that the government could avoid that scenario, but he understood, following the call, that there would be moves in Parliament next week which would allow the UK’s 29 March exit date from the EU to be put back “if it became clear we were heading towards that”.

Investment bank Goldman Sachs said Tuesday evening’s Parliamentary defeat for the prime minister made it more likely that the UK would pursue a “softer” Brexit, retaining closer ties to the EU, or even that Brexit might be overturned.

“We think the prospect of a disorderly ‘no-deal’ Brexit has faded further,” Goldman Sachs’ European economist Adrian Paul wrote in a note.

Goldman Sachs still believes the most likely outcome is that “a close variant” of the deal Mrs May has negotiated with Brussels will eventually be passed by the House of Commons.

Tuesday’s conference call, conducted by the chancellor, Brexit Secretary Stephen Barclay and Business Secretary Greg Clark, sought to reassure business leaders that a consensus could be built around a new version of the prime minister’s withdrawal deal.

However, the government appeared to be changing its stance to accept that a delay to the 29 March deadline might be necessary, according to reports.

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