Wednesday 24 August 2016 7:52 pm

Big City bosses batten down the hatches for Brexit deal drag

A drawn-out Brexit process would have a dire impact on the UK's investment and growth according to some of the City’s top veterans as they brace themselves for a lengthy divorce from the EU.

Sir Martin Sorrell, the chief executive of advertising giant WPP, BT chairman Sir Mike Rake, and private equity guru Jon Moulton are among senior figures concerned by the uncertainty created by June's vote to leave, warning that they do not expect the government’s negotiations to conclude for years.

"I think the key issue is certainty," Sorrell, a pro-Remain campaigner, said yesterday. "Because the uncertainty makes life very difficult. It's the enemy of growth, the enemy of investment, so is self-defeating."

He added: “Business generally would like certainty and therefore the whole situation resolved – they don’t want two years or three years of uncertainty. But unfortunately that’s probably what’s going to happen."

Speaking to City A.M., the WPP founder also revealed that he personally would like the British public to be given a second vote on the EU once Brexit terms have been agreed.

BT's Rake, meanwhile, said: “A prolonged period of uncertainty is bound to have an impact on investment. As we warned very clearly [before the vote] this is a very complex process that will take years. Business hates this level of uncertainty.”

And Better Capital founder Moulton added: "There's nobody with an interest in a long, slow process. Nobody. It would generate uncertainty, it would generate cost, and it quite likely would generate a complex, not very functional, outcome."

The predictions come after City A.M. revealed yesterday that Prime Minister Theresa May is facing pressure from some Tory backbenchers to go for a "snap Brexit", or a rapid exit from the EU.

However, leading City experts believe this path is fraught with difficulty.

"Clearly businesses would like a quick decision but I think we also recognise that the sheer scale and complexity of the relationship between the future UK and the future EU is one where there are going to be many trade-offs and it's also difficult because it's not just about what the UK wants," said Andrew Gray, global financial services Brexit leader at accountancy giant PwC.

"You should do it more slowly and take advantage [of the situation to lose some unwanted legislation]," said Barney Reynolds, a partner at Shearman & Sterling.

According to Iain Anderson, executive chairman public relations consultancy Cicero, a snap Brexit would "go down like a lead balloon in the City". He explained: "Access to the single market remains hugely important for so many sectors, but not least for the City. As we Brexit, we must do so in a way that does not damage economic self-interest."

Virgin Money chief executive Jayne-Anne Gadhia, agreed that a slower approach would be favourable. "For me, it’s better to do the right deal than the quick deal,” she told City A.M.

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