Access to the UK as part of the Single Market is the highest priority for European businesses in the upcoming Brexit negotiations, a new survey says.
Single Market access is the most important factor for 29 per cent of EU businesses with UK operations, according to a poll of 700 business leaders by accountancy firm RSM.
The future trade arrangement has been one of the most controversial aspects of Brexit, as European leaders have stuck to the line that the UK will not have access to the Single Market if it wants to be able to control immigration.
Prime Minister Theresa May has refused to rule out continued contributions to the EU budget if necessary to secure Single Market access.
The UK’s trade deficit with the EU was £8.11bn, according to the Office for National Statistics, with the UK importing £20.5bn of goods. Germany is the top import source internationally for the UK.
With negotiations yet to formally begin, 58 per cent of European companies with British operations believe the UK’s departure threatens their companies, according to the survey.
Meanwhile, 41 per cent think the UK has become less attractive as a destination for investment, with a quarter of those who have planned investments reviewing their decision.
Tax breaks and free movement of labour were the second most valued aspects for EU companies, with 22 per cent citing them as a top priority, and 21 per cent were most concerned about tariff levels.
Anand Selvarajan, regional leader for Europe at RSM International, said: “It is vital, in this period of uncertainty, that businesses focus and prepare for the future based on the emerging facts and are not paralysed by the countless doomsday theories out there.
“Trade will continue and businesses need to be agile in responding to the evolving political and economic landscape,” he added.