Legal certainty on a rapidly agreed transition is more valuable to businesses in the UK than a more elaborate final Brexit deal agreed later, a recent survey of CFOs and CEOs reveals.
Of the 280 CEOs and CFOs from medium-sized and large UK companies surveyed by KPMG, 68% said they would prefer legal certainty on transition by April 2018 with a less ambitious future deal, rather than a more comprehensive deal not agreed until much later.
The research also revealed that one in five CEOs and CFOs said their firms will not be able to operate as usual in March 2019 if there is no transition deal.
However, when asked what their business’s situation will be if the UK and EU do not reach a “steady state” transition agreement by April 2018, the picture is mixed. Three out of ten (33%) expect a negative impact on their business, but four out of ten (43%) expect their business to see some competitive advantage.
More than three-quarters (76%) of CEOs and CFOs are confident that the UK will secure a long-term Brexit deal with the EU before March 2019, while 16% said they were not confident.
The survey also found that CEOs and CFOs in transport, storage, construction and manufacturing are less likely to say they will be ready to operate as usual if there is no transition deal after the UK leaves the EU in March 2019.
James Stewart, head of Brexit at KPMG UK, said: “Whether business leaders see Brexit as a burden or a great British opportunity, most regard certainty around transition as one of the fundamental building blocks for growth.
“While the public is more fixated on the final deal, the CEOs we’re speaking to are often willing to accept a more modest deal in exchange for certainty so they can make investment decisions now.”