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Firms voice ‘guarded relief’ at Brexit deal amid doubts over Commons support

The BCC warned there was ‘still a long way to go’ before firms can plan for the future.

Scepticism was rife in financial markets over the Brexit deal (Philip Toscano/PA)
Scepticism was rife in financial markets over the Brexit deal (Philip Toscano/PA)

By Holly Williams, PA Deputy City Editor

British businesses have reacted with “guarded relief” to the Government’s breakthrough in Brexit talks with the EU, but warned certainty was still a long way off for under-pressure firms.

Firms voiced mounting concern at Prime Minister Boris Johnson getting the deal through Parliament, as the scale of the task ahead became apparent.

Financial markets also echoed these worries, with the pound quickly paring back the initial gains seen after the announcement, as the DUP reaffirmed its objections to the current deal on the table.

Let’s not forget, we’ve been here before. There is still a long way to go before businesses can confidently plan for the future. Adam Marshall, BCC

Sterling jumped to a five-month high against the greenback, at 1.299 US dollars, before losing ground to stand 0.4% lower at 1.276.

The British Chambers of Commerce (BCC) warned there was “still a long way to go” before business could feel confident of a deal being struck.

The comments come as businesses have been forced to shelve investment plans amid the Brexit uncertainty, which has taken its toll on the UK economy.

Gross domestic product contracted by 0.1% month-on-month in August, according to the latest official figures.

Adam Marshall at the BCC said: “Let’s not forget, we’ve been here before.

“There is still a long way to go before businesses can confidently plan for the future.

“Companies across the UK and around the world will be paying close attention to what happens next and whether the deal agreed can secure parliamentary support.”

The Institute of Directors (IoD) urged politicians to consider the implications of a cliff-edge Brexit and be “mindful of the longer-term consequences their actions may bring to bear”.

Jonathan Geldart, director general of the Institute of Directors, said: “Business leaders will feel guarded relief at the breakthrough in Brexit talks.”

He added: “As MPs study the draft deal, they must keep firmly in mind the damage a disorderly exit could cause businesses large and small.

“A further extension offers no guarantees of avoiding this outcome, but if a passable deal is in touching distance then politicians on all sides should be pragmatic about giving us the time to get there.”

While the pound’s volatility showed a degree of scepticism in financial markets, the FTSE 100 Index was surging higher, up 0.7% at 7219.8

Barclays chief executive Jes Staley cheered the deal as a “very welcome development after a prolonged period of uncertainty”.

He said: “We’ve seen a very positive reaction reflecting confidence in sterling and UK stocks, which indicates how much uncertainty has acted as a brake on growth.

“There are ratification hurdles remaining but further certainty, at this stage, would be very welcome.”

Marija Veitmane, a senior strategist at State Street Global Markets, said: “We still see a lot of challenges ahead.

“The economic rationale for both sides to reach the deal has been present for a long time, but unfortunately politics has been standing in the way.

“Those issues are yet to be resolved.”

PA

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