British businesses have rejected claims by leading Brexiters that trade with the rest of the world can replace free access to European markets, arguing that quitting the single market and customs union without a trade deal with the EU will harm their growth prospects.
In a report by the former shadow chancellor Ed Balls and Peter Sands, senior fellows at Harvard University’s Mossavar-Rahmani Center for Business and Government, UK businesses owners warned that a bad deal, or no deal, on Brexit would be disastrous for British jobs, investment and growth.
The warning comes as financial speculators circle London’s stock markets and investors bet on the value of the pound, triggering a period of intense volatility while No 10 attempts to restore a sense of confidence in the government.
On Friday, in the hours immediately after the surprise election result, the pound fell to an eight-week low and shares in banks, builders and retailers fell. The markets recovered as it seemed that the Conservatives had reached a deal with the DUP, but on Sunday the status of that deal looked less clear cut.
Figures out this week are expected to add further pressure on Theresa May as she fends off criticism of her plans to maintain cuts to government spending and restrict public sector pay. Analysts forecast the UK’s inflation rate will remain at elevated levels under May while wages remain stagnant, forcing ministers to admit that living standards will continue to plummet during the summer and most likely into the autumn.
Neil Dwane, global strategist at Allianz Global Investors, said: “Any possibility of another election – and uncertainty over who will lead the next government – puts downward pressure on sterling in the short term.”
via The Guardian
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