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Brexit: What London business leaders are saying after the triggering of Article 50

It’s a moment that has been nine months in the making, but today (Wednesday) the British ambassador to the EU, Sir Tim Barrow, has formally delivered the UK government’s decision to begin the two-year divorce proceedings and triggering Article 50.

While few can fathom exactly how the 24 months of labyrinthine talks will develop, nor what sort of deal the UK will have on its hands come March 2019, it is clear that the upcoming months are going to be a fraught affair with economic and political uncertainty an inevitability.

On this historic day, we canvassed the thoughts and opinions of some of London’s business leaders.

Ann Fracke, Chartered Management Institute

“The negotiations will be hugely complex and the Government must invite business leaders to the negotiating table to help secure the fairest possible new trading relationship for British business.

“EU withdrawal brings with it the chance to open up the country’s collective mindset to global business opportunities. We will fail if a culture of isolationism is allowed to grow.

“Multinational diversity has been fundamental to British business success and businesses need reassurance that EU nationals living and working in the UK will continue to have their rights guaranteed. In important areas like hospitality, construction and technology, businesses will struggle to survive and certainly to improve productivity without continued access to overseas talent pools.”

Colin Stanbridge, London Chamber of Commerce and Industry

“Given that economic uncertainty was businesses’ biggest cause for concern in the wake of the referendum, we hope that now Brexit negotiations are set to begin, businesses will be offered a greater sense of security. They will be looking for real answers to questions about the exiting process and trade negotiations as well as addressing the need for a London Visa to ensure that London is able to continue to access the skills it needs.

“However we also need to balance Brexit with the domestic agenda and make sure the government is listening to business concerns as the struggle with mounting costs.”

Nancy Curtin, Close Brothers Asset Management

“The fall in sterling since the Brexit vote provided a boost to the value of UK large-caps, given the largely international makeup of the FTSE 100. However, it is also bringing some economic upside, stimulating a much awaited rebalancing of the economy, as exporters and manufacturers benefit from the cheaper pound. And, for the most part, we are yet to see the negative effects of Brexit many touted as inevitable, such as the movement of major company headquarters or a plunge in consumer confidence.

“However, with inflation on the increase and with the pound reaching a one-month high against the dollar recently, it’s unclear how long this positive backdrop will last. If companies choose to pass on the higher price of imports to consumers, further driving up inflation, it may be short-lived.

“Then there’s the situation in Europe itself. Political uncertainties loom large on the horizon and the outcome of the French election could significantly impact negotiations.”

Marta Krupinska, Azimo

“As both an immigrant and UK resident – and the founder of a British-based business – I’m disappointed this day has finally come. London was without a doubt a great place to start my business. We succeeded because of access to talent (70% of the Azimo team hail from overseas), access to funding (we’re backed by international investors) and access to regulation (one license and FCA passport means we have been able to operate in multiple countries).

“My concern is the impact Brexit will have on my ability to employ my current staff, and on my ability to hire and remain competitive in the future – will this talent pool reduce as people seek employment in other sectors, and will investors be drawn to more open markets?

“More broadly, I worry about the future of the UK startup scene as the leaders of tomorrow’s businesses set up elsewhere. We represent 99% of all businesses in the UK and contribute 50% of the total economy. We have a right to be heard.”

Damian Routley, AdGlow

“I think we need a loud call for level heads over the next two years and immediately after. I’m a devout pragmatist and I don’t subscribe the fear mongering prevalent in the media. The creative economy and digital businesses in the UK view the whole world as their market, rather than solely the EU.

“If we can maintain regulatory stability, maintain access to capital both financial and human, then the outlook will be positive. To rewrite the rule book at this stage would just cause confusion and make no sense.

“On a personal level, speaking from the perspective of running the UK arm of a Spanish owned business, I really hope we maintain status quo. Already my European colleagues look at us in the UK as shattering the hopes of a unified single market. I would find it difficult to defend our stance if we pursue a narrow-mindedness as relates to trade and movement of people.”

Francesco Cardoletti, PawSquad

“Triggering Article 50 is the equivalent of jumping off a cliff hoping that your untested parachute will open. It is quite the risky business.

“The government approach to Brexit has been strictly political and it is clear that the cost to the UK economy has not been factored in (namely, inflation, slower growth, shortage of talent, reduced access to capital, inability to operate efficiently and effectively in the EU, the drop in house prices, just to name a few.) Regrettably, how we’d like the process to look, is irrelevant.

“The UK has effectively no bargaining chips and the EU has little to no incentive to offer a good deal. The best hope for the UK in the short term is (i) for the UK-EU to find a solution for the million of EU/UK foreign residents (ii) retain passporting rights for financial institutions to trade in the EU (this will keep the fintech sector afloat) and (iii) create incentives for business to keep investing in the UK economy.”

Nick Katz, Splittable

“I hate to be the bearer of bad news, but we spend too much time sugar coating things in this period. Brexit cannot be good for the tech sector as a whole in the near to mid-term. Investors are increasingly turning their focus towards companies that are at the least revenue generative and at the most profitable.

“You can’t blame them for this - with less certainty around capital being available from one of the largest backers of UK VC, the EIF (European Investment Fund), UK investors are becoming more risk averse. As a company we are doubling down on putting ourselves in a position to reach break even as soon as possible, so that fundraising becomes an option rather than a necessity. Many of my founder friends in the space are doing the same.

“A lot of companies won’t make it as purse strings are tightened, which is a shame, but at the same time that creative destruction does do a few amazing things. It frees up some of the best talent in the market to go find new homes at companies with slightly more stable footing or join companies earlier to play a more pivotal role in building that idea into a sustainable business.”

Tim Mills, Angel CoFund

“Although there’s a inevitable sense of uncertainty surrounding Brexit, today’s triggering of Article 50 should not eclipse the golden opportunity for British businesses to flourish. Digital disruptions is driving change across the global economy and the UK’s exceptional track record for innovation continues to make it ideally placed to benefit.

“The recent Tech Nation 2017 report revealed that the UK’s digital tech industries now contribute a gargantuan £97bn to our economy, and the UK enjoyed £6.8bn in tech investment last year—despite the result of the EU Referendum. These statistics instil confidence for a post-Brexit future where innovative high-growth businesses will generate ever greater value – providing a positive outcome which can too easily be lost amongst the headline grabbing challenges.

“For investors it’s crucial to stay focussed on the bigger opportunity and continue to back bold investments that can become the engine of tomorrow’s post-Brexit Britain. Specifically we need to continue to work together with individuals and institutions, using syndication to enhance investment prospects and spread the risk.

“A model that allows a more extensive range of companies to be supported with a greater supply of finance across the UK. Undoubtedly, something our economy needs as we approach this uncharted territory.”

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