Ahead of this week’s EU Summit in Brussels, and despite the apparent deadlock over the UK’s Brexit bill, middle market businesses remain bullish about the prospects of the UK securing a good deal.
According to the latest YouGov survey, the Brexit Monitor, commissioned by leading audit, tax and consulting firm RSM, 45 per cent of respondents were confident that the government could achieve a good deal. This was more than double the 21 per cent who said they were unconfident. This latest sentiment appears to contradict recent fears of a no deal outcome.
The quarterly survey of more than 300 UK middle market business leaders also revealed a slight increase in confidence regarding the long-term effects of Brexit.
RSM’s Brexit Monitor index, in which any reading above 100 indicates that businesses are more optimistic than pessimistic, showed that sentiment about the impact of Brexit on the economy over a five-year period rose from an index score of 106 in the last quarter to 108.
Businesses in London saw a decline in confidence to become the stand-out pessimist in the UK. London business sentiment around the impact of Brexit on the economy over a five-year period registered a score of just 95 on the index, the only region in negative territory. Central England, by contrast, was the most optimistic, registering a score of 122.
The technology, media and telecommunications (TMT) sector stood out as the most consistently upbeat in terms of the likely impact of Brexit on the industry’s prospects over the next five years, registering an index score of 133.
Conversely, the consumer market saw the most challenging conditions ahead for their industry, with an index score of just 94.
Sixty per cent of respondents said that access to the single market, in some form, should be a negotiation priority for UK government. Assuring the rights of EU citizens in the UK was the second most important consideration at 27 per cent.
Simon Hart, RSM’s Brexit lead partner said:
‘Despite the political challenges, businesses remain relatively confident about the government’s ability to deliver a good deal and sentiment towards the longer-term impact of Brexit appears to be becoming marginally more optimistic.
‘We’re also seeing a decline in the polarisation of opinion over the impact of Brexit on the economy as we move further away from the referendum. There are clearly many unanswered questions regarding our future trading relationships with the EU and other global markets. However, the latest results of our survey suggest that perhaps businesses are taking a more pragmatic view of what could lie ahead and are taking steps to adapt and emerge stronger post-Brexit.’
Thinking about the sort of trade deal that mid-market firms would like to see with the EU once the UK has left, 22 per cent favoured the Canadian and Norwegian models respectively, 19 per cent the City State model (Singapore and Hong Kong) and 17 per cent the Swiss model. Only 6 per cent preferred the Turkish model.