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EU Companies Plan Retreat From Suppliers in Britain

Some 63% of non-British European companies expect to move some of their supply chain out of Britain, up from 44% in May
TV firms may have to move some operations abroad if there is no Brexit trade deal,  the Commercial Broadcasters Association in the UK has warned.TV firms may have to move some operations abroad if there is no Brexit trade deal,  the Commercial Broadcasters Association in the UK has warned.

Most European businesses plan to cut back orders from British suppliers because of the slow progress of Brexit talks, a survey of company managers showed on Monday.

Some 63% of non-British European companies expect to move some of their supply chain out of Britain, up from 44% in May, the Chartered Institute of Procurement and Supply said, Reuters reported.

With only 17 months left until Britain is due to exit the European Union, the lack of clear progress in the negotiations has raised fears among executives of an abrupt departure with no transition. Monday's survey raised the prospect of disruption for British manufacturers with EU clients.

On Sunday, the Confederation of British Industry said almost two in three British firms will have implemented Brexit contingency plans by March if Britain and the rest of the EU have not struck a transitional deal by then.

UK business called for an end to the "soap opera" of Brexit and a return to the spirit of national unity last seen in World War II as it pushed for certainty on Britain's future relationship with the European Union.

Ready to Speed Up Talks

Britain and the EU said last week they were ready to speed up talks, but CIPS said it was already too late for scores of businesses that look likely to be dropped by European customers.

"British businesses simply cannot put their suppliers and customers on hold while the negotiators get their act together," said Gerry Walsh, CIPS' group chief executive officer. "The lack of clarity coming from both sides is already shaping the British economy of the future—and it does not fill businesses with confidence."

Hammond Should Act

British Finance Minister Philip Hammond said last month that a transition deal needed to be struck by early 2018.

CIPS said a fifth of British businesses were struggling to secure contracts that extend beyond March 2019, the date Britain is due to leave the EU. Its survey also added to signs that the pound's plunge after last year's Brexit vote did more harm than good to Britain's economy. Nearly two-thirds of firms said the fluctuations had raised the cost of managing their supply chains.

Hammond is under pressure to help British businesses as he readies his November 22 annual budget.

Manufacturing association EEF urged him to take measures that will boost Britain's patchy investment performance.

"The chancellor has to offset acute anxiety among companies over Brexit with a budget that reassures business the government will deliver a comprehensive and ambitious industrial strategy," said EEF chief executive Terry Scuoler.

EEF recommended that Hammond should boost capital allowances and tax credits for research and design in British companies.

The CIPS survey of 1,118 supply chain managers was conducted between Sept 4 to Oct 5. A total of 106 EU-based businesses with British supply chains took part in the survey.

Trade Body Warns

TV firms may have to move some operations abroad if there is no Brexit trade deal, the body for international broadcasters in the UK has warned. It says thousands of jobs could potentially be at stake in the event of a "hard " Brexit, where the UK leaves the EU with no formal trade agreement, BBC reported.

The Commercial Broadcasters Association speaks for media networks such as Eurosport, Disney and Discovery. The government says it "will work to get the right deal for broadcasters".

Adam Minns, executive director of COBA, estimates that one in four jobs in the UK broadcasting sector is working exclusively, or in part, on an international channel. He also says there is more than £500 million ($655.82 million) a year invested in wages, overheads and technology.

"No [trade] deal would jeopardize the UK's status as Europe's leading international broadcasting hub," says COBA. "International broadcasters based here would, reluctantly, be forced to restructure their European operations. No deal would put at risk thousands of jobs in the UK broadcasting sector, hundreds of millions of pounds of investment every year, and would undermine the sector's long-term global competitiveness.

"Like many sectors, broadcasters cannot wait until the cliff edge of March 2019 to make decisions about the future of their European businesses."

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