Business warnings grow as clock ticks on Brexit talks

 
Catherine Neilan
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Politicians have just a few weeks left to strike a Brexit deal or risk damaging economies on both sides of the divide, business groups have warned.

The fifth round of talks ended in yet another stalemate yesterday, with the EU's chief negotiator Michel Barnier describing the deadlock around the so-called divorce bill as "disturbing".

Barnier said a breakthrough was "within our grasp within the next two months" but not in time for the next meeting of the European Council next week. Instead, "decisive" progress could be made in time for the next European Council meeting before Christmas, he said.

Barnier's words sent the pound falling more than 0.5 per cent against the euro and dollar, as the prospect of a no deal appeared to grip markets.

Brexit secretary David Davis was more upbeat, as he has been throughout the process, although even he acknowledged there was no way around the impasse currently.

Of the thorny divorce bill, Davis said there had been "a rigorous examination of the technical detail where we need to reach a shared view".

But business groups urged both sides to put politics behind them so that trade and transition can be discussed before the new year.

City of London Corporation's policy chairman Catherine McGuinness said firms would "have their head in their hands" over the lack of progress, arguing it was time for a compromise to be reached on the divorce settlement.

“We can’t keep haggling over every last penny on the final bill. In the long run this may cost us more than we gain if it takes so long that businesses have had to move unnecessarily because of the uncertainty," she said.

Carolyn Fairbairn, director general of the Confederation of British Industry, said the deadlock was "deeply concerning" to businesses both in the UK and Europe.

“Both sides must show the leadership and determination to get the talks moving more quickly because jobs and investment across Europe depend upon it," she added. “The need to agree transition and start moving to discussions on the final deal by the end of the year is of paramount importance."

Miles Beale, chief executive of the Wine and Spirit Trade Association, agreed. "Brexit cannot falter on ideology and dogma [and] that inevitably means compromise on both sides. A failed negotiation would be a disaster for UK and EU business and citizens alike," he said.

Terry Scuoler, chief executive of manufacturers' trade body EEF, said the ball was in Brussels' court. "The EU Council must show leadership next week and build on the Prime Minister’s constructive approach set out in her speech in Florence and move quickly to protect our collective economic interests," he added.

Iain Anderson of lobby firm Cicero claimed the impasse was being caused by "politics, rather than policy", warning that could still be the case come December, although Shilen Shah, bond strategist at Investec Wealth & Investment, said markets would cling to Barnier's optimism that "decisive progress" could be made by Christmas.

Federation of Small Business (FSB) boss Mike Cherry, agreed some "comfort" could be taken from the scheduling of further talks before the end of the year, but warned: "In the event of a ‘no-deal’ Brexit scenario, proper contingency planning, from the UK government and the EU27, must accelerate to reduce the detrimental impacts of any cliff edge exit.”

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