Brexit could create a “real opening” for UK businesses to develop closer trading ties with non-EU economies, according to S&P Global Ratings.
Although exiting the European Union is likely to cause “significant uncertainty” in the next two years at least, an S&P Global report out today forecast opportunities in the medium term.
The report, Life after Article 50, said: “Our base-case view is that, gradually, a pathway to an orderly transition to a new comprehensive relationship with the EU should materialise, including a transition phase to provide for the final details to be agreed, ratified, and implemented.
“In the medium term, there is a real opening for UK business to develop closer trading relations with faster-growing non-EU economies. This will play to the UK economy’s strengths, by focusing on faster-growing, technologically advanced, value-added manufacturing and services.”
S&P Global noted, however, that in order for this to become a reality the UK will require greater public and private investment commitments as well as more research and development (R&D) funding.
“This vision of a free-trade economy, open to the world, will require an increased commitment to investment, and research and development, from public and private sectors to counter likely lower levels of foreign direct investment,” said S&P Global Ratings analyst Paul Watters.
“And where skill shortages exist, immigration rules need to ensure that companies have the ability to recruit the necessary employees from overseas.”