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Wednesday, November 22, 2017

Brexit Leads Three-Quarters of Britain’s CEOs to Consider Moving

Updated

By Bloomberg

The street level sign of the KPMG buliding in downtown Los Angeles is shown April 10, 2013. (REUTERS/Sam Mircovich) / mb.com.ph

The street level sign of the KPMG buliding in downtown Los Angeles is shown April 10, 2013.
(REUTERS/Sam Mircovich) / mb.com.ph

The U.K.’s vote to leave the European Union has left more than three-quarters of chief executive officers saying they would consider moving their headquarters or operations outside Britain, according to a survey of 100 business leaders by the accountancy firm KPMG.

Some 72 percent of the CEOs surveyed said they voted “Remain” in the June 23 Brexit referendum , KPMG said on Monday in an e-mailed statement. While 69 percent said they’re confident Britain’s economy will continue to grow over the next year, and 73 percent expressed confidence their companies will grow, 76 percent are mulling some form of relocation.

“CEOs are reacting to the prevailing uncertainty with contingency planning,” KPMG U.K. Chairman Simon Collins said in a statement.

“Over half believe the U.K.’s ability to do business will be disrupted once we Brexit and therefore, for many CEOs, it is important that they plan different scenarios to hedge against future disruption.”

The survey suggests Prime Minister Theresa May has work to do to retain businesses and jobs as the U.K. seeks a deal with the EU that curbs immigration while retaining the closest trading ties possible with the bloc’s 27 other members.

Before the referendum, the then-Chancellor of the Exchequer George Osborne said a vote to leave would endanger as many as 820,000 jobs.

Pound Depreciation

While the pound has fallen by 13 percent against the dollar since the vote, some of the direst pre-referendum predictions have failed to come true, particularly about the economic outlook. Still, May has yet to trigger a formal exit, saying only she won’t begin the two-year process this year.

“Policy makers should be really concerned about a leaching of British business abroad and should engage with business early to understand what assurances they can offer and closely monitor any shifts overseas,” Collins said.

“Contingency planning is just that –- a form of insurance –- but it must not become ‘plan A.’ Moving headquarters abroad is radical and hits the headlines but businesses could start shifting operations abroad with little public attention. We hear it time and time again that business needs certainty.”

KPMG interviewed 100 U.K. CEOs of companies with annual sales of at least 100 million pounds ($130 million) and at least 500 employees. The survey was carried out over four weeks from mid-July.

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