Business leaders say frayed relations with the EU are costing the UK economy as suppliers in the bloc become more cautious about doing business with Britain after Brexit.
Adding to the pressure on Rishi Sunak’s government, as bosses warn that the UK is falling behind its peers, manufacturer group Make UK called for an urgent reset of political and trade ties with the EU.
The trade body said nearly half of UK manufacturers in a survey of more than 100 leading industrial companies said their EU suppliers had become more cautious about doing business in Britain.
It also said a fraught post-Brexit relationship could have a detrimental impact on trade relations elsewhere in the world, amid signs that businesses from further afield have also become more cautious about supplying the UK.
Speaking at the national manufacturing conference in London on Tuesday, Make UK CEO Stephen Phipson will argue that the report underscores the need to build stronger relations with the EU post-Brexit.
He called on the government to make further progress following the “Windsor framework” deal on post-Brexit trade in Northern Ireland.
“I would like to applaud the Prime Minister’s positive approach, which shows what you can achieve when you are pragmatic and collaborative, rather than knocking the table or making threats. Hopefully, the agreement reached last week is the start of a new chapter.”
Earlier this year, Make UK said more than 40% of manufacturers thought the political chaos of the past year had damaged the UK’s image as a place for foreign direct investment.
With growing caution among international counterparts about doing business in Britain, the industry’s latest health check showed that many companies were looking to source suppliers closer to home and diversify their supply chains amid concerns about political instability.
Nearly a fifth of manufacturers said they had reduced the number of suppliers from the EU in the past 12 months. However, the report showed that the UK’s image had been damaged and the trading relationship was not limited to partners in the EU: 35% of companies agreed that suppliers from the rest of the world were also wary of Britain .
US bank Citigroup said Monday it planned to double its workforce in Paris by building a new trading floor in the French capital as part of a gradual shift by global lenders away from London after decades of using the UK as a hub for EU business.
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Fabio Lisanti, the bank’s head of trading operations in Europe excluding the UK, told Bloomberg News that London would remain the main location in the region, but more staff would be transferred to Paris.
“We’ve moved quite a bit already and there’s more to go,” he said. “We were able to hire talent in Paris that we could never have attracted in London.”
A spokesman for the Department for Business and Trade said: “A recent poll of global CEOs found the UK ranked third for investment, showing that our economy with low taxes and highly skilled companies remains highly attractive to business leaders across the globe. whole world.
“The government is investing heavily in growth sectors such as advanced manufacturing and life sciences, further supporting businesses by reducing energy costs for our most energy-intensive industries.”