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In a letter to the Brexit secretary seen by the Guardian, five of the UK’s biggest business lobby groups said time was running out for the government to strike a transition deal before firms start to rein in spending plans as they finalise budgets for 2018 and prepare to implement contingency plans for Britain’s departure from the EU.
“We need agreement of transitional arrangements as soon as possible, as without urgent agreement many companies have serious decisions about investment and contingency plans to take at the start of 2018,” the business groups wrote.
“Failure to agree a transition period of at least two years could have wide-reaching and damaging consequences for investment and trade, as firms review their investment plans and business strategies.” [...]
The CBI and British Chambers of Commerce were among the signatories warning Davis of the potentially dire consequences for the UK economy if he failed to agree a transition period of at least two years with the EU. The bosses of the manufacturing trade body EEF, the Institute of Directors and the Federation of Small Businesses also signed the letter on behalf of their members, who employ millions of UK workers.
They stressed that a transition period before new long-term arrangements came into force should be “matched as closely as possible to the current UK relationship”, to limit disruption to firms. [...]