Business leaders yesterday declared ‘Christmas has come early’ as the City welcomed Theresa May’s Brexit breakthrough.
Traders also cheered the deal, adding £18.9billion to the value of the blue chip FTSE 100 index, while the pound touched six-month highs against the euro before giving up the gains.
The early-morning breakthrough in Brussels came after months of pressure from big business, with major banks threatening to pull jobs out of London unless their needs were made a top priority.
Britain’s Secretary of State for Exiting the European Union David Davis, Britain’s Prime Minister Theresa May, European Commission President Jean-Claude Juncker and European Union’s chief Brexit negotiator Michel Barnier meet at the European Commission in Brussels
Catherine McGuinness, policy chairman of the City of London Corporation, has warned repeatedly of the need for progress and suggested the UK’s financial services industry would suffer without a deal
Bosses are desperate to secure a transition deal of at least two years, meaning no major change in trade rules until 2021 at the earliest. They also wanted guarantees that their foreign employees’ rights will be protected.
Chief executives and top lobbyists were queuing up yesterday to say that crucial progress has been made on both counts.
Lord Wolfson, the chief executive of retailer Next and a Brexit-backer who has previously criticised the Government for muddled thinking, said: ‘It looks like good news that there is going to be a transition period which makes sense for everybody.
‘You get days when you go to bed and think negotiations are never going to happen.
‘I hope we don’t go into national meltdown for the next 18 months the next time the talks hit the buffers.’
The £39bn bill looks eye watering…but it’s what the UK spends in just 18 days
Costly: Ex-RBS boss Fred ‘The Shred’ Goodwin
Less than the £45billion that taxpayers stumped up to rescue Royal Bank of Scotland from collapse in 2008
At least £2billion less than the £41.4billion we would pay Brussels for staying in the European Union from 2019 to 2022
Equal to 18 days of Government spending – which is expected to be £795.3 billion this year
What the State earns in just 46 days from income tax and National Insurance receipts
How much the NHS spends every three months from its annual budget of £155billion
Less than the £40.9billion in annual interest payments on Britain’s national debt
Likely to be less than what we spend on foreign aid in the next three years – an amount that hit £13.3 billion in 2016
What consumers spent every 15 weeks on internet shopping last year, out of an annual bill of £133billion
Less than Britain’s total imports of goods in October of £41 billion
Catherine McGuinness, policy chairman of the City of London Corporation, has warned repeatedly of the need for progress and suggested the UK’s financial services industry would suffer without a deal.
Yesterday she said: ‘Christmas has come early for financial firms with the news that Brexit negotiations can now move to phase two. The hard work starts now.
‘The UK’s future trading relationship with the EU will mark one of the most important pieces of legislation in a century – it is vital we get it right first time.’
It was a view echoed by Royal Bank of Scotland chief executive Ross McEwan, who said the development paved the way for a transition deal that will be ‘really good news’.
And David Sproul, a top executive at accountancy giant Deloitte, said that the deal would lead to ‘a stronger UK and EU’. Kevin Ellis, chairman and senior partner at rival firm PwC, said: ‘Today’s news is a positive step toward opening up the all-important negotiations on a trade framework that can ensure economic stability and prosperity for both the UK and EU.’
The breakthrough was welcomed by businesses of all sizes, selling everything from beer to buildings.
It is hoped business investment will ramp up as firms realise the dangers posed by a chaotic Brexit are fading away. Rob Perrins, chief executive of housebuilder Berkeley, said Mrs May’s success was ‘fantastic’ and Patrick Dardis, boss of pubs group Young’s, cheered ‘great news for our industry and the UK in general’.
Adam Marshall, director-general of the British Chambers of Commerce, said: ‘Businesses will be breathing a sigh of relief. After the noise and political brinksmanship of recent days, news of a breakthrough in the negotiations will be warmly welcomed by companies across the UK. The job of the UK government and the European Commission now is to provide answers – and do everything in their power to ensure vibrant cross-border trade between the UK and EU countries can continue.’
Mike Cherry of the Federation of Small Businesses said: ‘The UK’s millions of small businesses will be pleased to hear that finally it appears the Brexit talks are about to move on to the second stage.
‘The focus must now shift to the UK’s future trading relationship with the EU.’
The EEF, which represents manufacturers, said firms would be relieved but there was still a long way to go. Bankers’ lobbying group UK Finance called it ‘a positive step’ but argued that more detail was needed in the new year.
The pound briefly hit its best level against the euro in six months at more than 1.15 euros, before dropping back to end the day down 0.7 per cent at below 1.14 euros. It slipped 0.7 per cent against the dollar to dip below $1.34.
The FTSE 100 rose 1 per cent or 73.21 points to 7393.96.
Sam Woods, deputy governor of the Bank of England, said: ‘It looks like good news today, a significant step forward in the political negotiation. We at the Bank of England are very much on the case delivering our part of Brexit.’
Record boom for British exports
British manufacturers are enjoying their longest unbroken run of expansion for more than 20 years as the weak pound boosts exports, official figures showed yesterday.
In another sign that the economy continues to flourish following the vote to leave the European Union, factory output has increased for six months in a row for the first time since records began in 1997.
Record car production was the driving force behind the latest upturn, according to the Office for National Statistics, amid booming demand for British-made cars around the world.
British manufacturers are enjoying their longest unbroken run of expansion for more than 20 years as the weak pound boosts exports
A separate ONS report showed exports of British goods have hit a record high, with sales to countries outside the European Union again outstripping those to the Brussels-run bloc.
And in a further boost, the National Institute of Economic and Social Research said total economic output in the UK increased by 0.5 per cent in the three months to the end of November. Howard Archer, chief economic adviser to the Ernst & Young Item Club, said the manufacturing sector was ‘very much the bright spot for the UK economy’.
Kate Davies, of the ONS, said: ‘While manufacturing was relatively subdued overall in October despite record production of cars destined for export, the longer-term picture is one of strong growth.’
The figures came just a day after a report by HMRC showed exports of goods have risen in every region of the UK this year.