‘Brexit’ prompts British CEOs to consider relocating
Amajority of British chief executives are considering moving their headquarters or some of their operations outside Britain as a result of the country’s decision to leave the European Union, according to a new survey by the accounting firm KPMG.
Three-quarters of British chief executives surveyed said they had considered relocating part or all of their businesses following the June 23 referendum, which has come to be known as Brexit.
“In our own work, we have seen international clients who had been considering basing European headquarters in the UK opt for Ireland instead. Our latest analysis shows that this effect could be exaggerated by UK companies moving,” Simon Collins, the chairman of KPMG’s British operations and a senior partner at the firm, said in a statement.
“We hear it time and time again that business needs certainty,” Collins added. “Policy makers should be really concerned about a leaching of British businesses abroad and should engage with businesses early to understand what assurances they can offer and closely monitor any shifts overseas.”
To be sure, few chief executives have made concrete moves to relocate their businesses. In fact, more than two-thirds of the leaders surveyed remain confident about the future growth prospects of Britain over the next three years. But more than half of those surveyed believe that Britain’s ability to effectively conduct business will be hindered once the nation leaves the bloc. The vast majority of those surveyed voted to remain in the European Union, KPMG said.
One hundred chief executives in manufacturing, retail, telecommunications and other sectors in Britain were interviewed for the KPMG survey. They all run companies with annual revenue from 100 million pounds, or about $130 million, to more than £1 billion.
The new survey data came as the pound fell to a five-week low against the dollar and other major currencies on Friday over concerns that Britain might leave the European Union at a swifter pace than expected.
Boris Johnson, the foreign secretary, told Sky News that Britain could start the process to leave the bloc early next year and sever its ties with the European Union in less than two years.
The survey results also came against the backdrop of betterthan-expected economic data in Britain in recent weeks.
The Bank of England held interest rates steady this month, but indicated it could further cut rates if Britain’s economic outlook weakens.
In August, the central bank cut its benchmark interest rate to 0.25 per cent — the lowest level in its 322-year history — and expanded other measures to bolster Britain’s economy over concern that the leave vote could hinder growth.
According to the minutes of its most recent meeting, the Bank of England’s Monetary Policy Committee acknowledged that Britain’s economy was growing at a slightly faster pace than originally expected after the referendum and that it now expected “less of a slowing” in gross domestic product growth in the second half of the year.
With that said, the committee said it still believed “the contours of the economic outlook following the EU referendum had not changed” and a further cut in rates to just above zero is possible if the economic outlook is “judged to be broadly consistent” with its forecast in August.
The central bank is expected to provide its next round of forecasts for inflation and other economic indicators in November.