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KPMG Survey Finds Post-Brexit Majority of UK CEOs Considering Moving Operations Abroad


09/26/2016


KPMG Survey Finds Post-Brexit Majority of UK CEOs Considering Moving Operations Abroad
There is more bad news for Britain related to its exit from the European Union.
 
A recent survey has revealed that following the vote to leave the European Union by Britain, at least three-quarters of British company bosses are considering moving operations abroad and out of the country.
 
The KPMG survey found that about 86 percent of the company bosses were confident about their company's growth prospects and 69 percent were confident about the British economy's growth prospects over the next three years. This survey was conducted on a total of 100 UK chief executives, from companies with revenues between 100 million pounds and 1 billion pounds ($130 million-$1.30 billion).
 
However what is more alarming is that the number of executives considering moving either their headquarters or their operations outside Britain because of the June 23 "Brexit" vote was 76 percent of the interviewees.
 
"CEOs are reacting to the prevailing uncertainty with contingency planning. Over half believe the UK's ability to do business will be disrupted once we Brexit and therefore, for many CEOs, it is important that they plan different scenarios to hedge against future disruption," said Simon Collins, KPMG UK chairman.
 
A great deal of uncertainty over Britain's future economic and trade relationship with the European Union has been created by the June vote.
 
As soon as Britain invoked Article 50 of the EU's Lisbon Treaty, which triggers the start of exit from the bloc, the insurance market would be ready to move some of its business to the EU, John Nelson, chairman of Lloyd's of London, told Reuters last week.
 
The way for up to two years of negotiations would be opened up as Prime Minister Theresa May hopes to trigger Article 50 early next year said aides to Prime Minister May.
 
The majority of CEOs surveyed by KPMG ranked certainty over trade terms as the most important when asked what would encourage businesses to continue investing in Britain following the Brexit vote.
 
Most importance to the potential timetable for triggering the formal divorce process and the subsequent exit was accorded by only one CEO among those surveyed.
 
72 percent of the CEOs surveyed had voted to remain in the EU, KPMG said.
 
While a Reuters poll this month found Britain is expected to narrowly dodge a mild recession that was widely predicted after the referendum, it is a fact that the Brexit vote has hit the British currency, with sterling skidding to a five-week low close against the dollar on Friday.
 
Various other governments in the EU have clearly stated that  Britain's banking sector can only enjoy EU market access post-Brexit if the country still follows the bloc's rules and the survey found that more than 20 European business associations and companies interviewed by Reuters said they backed their governments' position.
 
(Source:www.reuters.com)