Ulrich Schoof, senior project manager at Bertelsmann Stiftung, claimed in 2015 that an exit from the EU would have long-term negative consequences in terms of UK growth.
Upon calculating the economic effects of an EU exit, Bertelsmann Stiftung developed three scenarios to estimate the range of possible effects. In the most favourable case, the UK received a status similar to Switzerland and maintained a trade agreement with the EU. In the least favourable scenario, the country would lose all trade privileges, as well as its free trade agreements.
It is the reduction in trade activities that UK firms now fear most of all – four out of five oppose a withdrawal from the EU, with leaders warning of possible negative effects on employment, revenues and investments.
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Some 42 per cent of business leaders expected to see an adverse impact on their respective job markets, with only 13 per cent claiming such a move would positively impact national employment rates and unemployment levels.
Corporate bosses were also concerned about how an exit would impact their own economic sectors, with 38 per cent of employers worrying about plunging sales, 33 per cent fearing changes to investments and 34 per cent citing employment issues.
Most evident was an expectation that there would be an impact on corporate decision making, with 29 per cent wanting to either reduce capacity in the UK or relocate elsewhere. The IT sector led the way with 41 per cent of respondents expressing such policy intentions, followed by 33 per cent of financial institutions.
Similarly, Caxton FX’s latest survey results indicated SMEs tend to find trade opportunities and regulations more satisfactory under EU membership, with 66 per cent preferring the greater trade access provided by the EU market, and 45 per cent prioritising greater harmony in the EU regulatory environment.
Segmenting the results by industry also revealed some interesting trends – 100 per cent of the agriculture, forestry and fishing industries were against Brexit.
“Brexit” is the elephant in the room for business at the moment. But what do SMEs need to do to prepare, if anything?