Christmas has come early say City bosses
BUSINESS leaders yesterday declared ‘Christmas has come early’ as the City welcomed Theresa May’s Brexit breakthrough.
Traders also cheered the deal, adding £18.9billion to the value of the blue chip FTSE 100 index, while the pound touched six-month highs against the euro before giving up the gains.
The early-morning breakthrough in Brussels came after months of pressure from big business, with major banks threatening to pull jobs out of London unless their needs were made a top priority.
Bosses are desperate to secure a transition deal of at least two years, meaning no major change in trade rules until 2021 at the earliest. They also wanted guarantees that their foreign employees’ rights will be protected.
Chief executives and top lobbyists were queuing up yesterday to say that crucial progress has been made on both counts.
Lord Wolfson, the chief executive of retailer Next and a Brexit-backer who has previously criticised the Government for muddled thinking, said: ‘It looks like good news that there is going to be a transition period which makes sense for everybody.
‘You get days when you go to bed and think negotiations are never going to happen.
‘I hope we don’t go into national meltdown for the next 18 months the next time the talks hit the buffers.’
Catherine McGuinness, policy chairman of the City of London Corporation, has warned repeatedly of the need for progress and suggested the UK’s financial services industry would suffer without a deal.
Yesterday she said: ‘Christmas has come early for financial firms with the news that Brexit negotiations can now move to phase two. The hard work starts now.
‘The UK’s future trading relationship with the EU will mark one of the most important pieces of legislation in a century – it is vital we get it right first time.’
It was a view echoed by Royal Bank of Scotland chief executive Ross McEwan, who said the development paved the way for a transition deal that will be ‘really good news’.
And David Sproul, a top executive at accountancy giant Deloitte, said that the deal would lead to ‘a stronger UK and EU’. Kevin Ellis, chairman and senior partner at rival firm PwC, said: ‘Today’s news is a positive step toward opening up the all-important negotiations on a trade framework that can ensure economic stability and prosperity for both the UK and EU.’
The breakthrough was welcomed by businesses of all sizes, selling everything from beer to buildings.
It is hoped business investment will ramp up as firms realise the dangers posed by a chaotic Brexit are fading away. Rob Perrins, chief executive of housebuilder Berkeley, said Mrs May’s success was ‘fantastic’ and Patrick Dardis, boss of pubs group Young’s, cheered ‘great news for our industry and the UK in general’.
Adam Marshall, directorgeneral of the British Chambers of Commerce, said: ‘Businesses will be breathing a sigh of relief. After the noise and political brinksmanship of recent days, news of a breakthrough in the negotiations will be warmly welcomed by companies across the UK. The job of the UK government and the European Commission now is to provide answers – and do everything in their power to ensure vibrant cross-border trade between the UK and EU countries can continue.’
Mike Cherry of the Federation of Small Businesses said: ‘The UK’s millions of small businesses will be pleased to hear that finally it appears the Brexit talks are about to move on to the second stage.
‘The focus must now shift to the UK’s future trading relationship with the EU.’
The EEF, which represents manufacturers, said firms would be relieved but there
was still a long way to go. Bankers’ lobbying group UK Finance called it ‘a positive step’ but argued that more detail was needed in the new year.
The pound briefly hit its best level against the euro in six months at more than 1.15 euros, before dropping back to end the day down 0.7 per cent at below 1.14 euros. It slipped 0.7 per cent against the dollar to dip below $1.34.
The FTSE 100 rose 1 per cent or 73.21 points to 7393.96.
Sam Woods, deputy governor of the Bank of england, said: ‘It looks like good news today, a significant step forward in the political negotiation. We at the Bank of england are very much on the case delivering our part of Brexit.’