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Brexit impact could be years away, but UK firms told to prepare

Reuters  |  MANCHESTER, England 

By Huw Jones

MANCHESTER, (Reuters) - Britain's businesses may not feel the impact of Brexit for several years, but should not count on the country eventually striking a good trade deal with the rest of Europe, company treasurers were told at a conference on Tuesday.

Paul Watters, head of corporate research for S&P Global Ratings, said his "working assumption" was for an orderly transition for out of the European Union in 2019 - and that a compromise on eventual trading terms would emerge.

Recent spats between and leaders over Brexit have raised fears over a "hard" or "cliff edge" Brexit, with crashing out of the bloc without a deal.

"From a practical standpoint, have got to do their contingency planning, but in the expectation that things are going to be business as usual in reality over the next potentially five years," Watters told the Association of Corporate Treasurers' (ACT) annual conference.

Monique Ebell, associate research director at the National Institute of Economic and Social Research, said eastern countries, for example, were more worried about keeping the bloc together to bolster security than the limited economic fallout for them from Brexit.

"I wouldn't be too optimistic about getting a great deal," Ebell said. "It's very difficult to say how successful the will be at negotiating a maybe very good deal ... with the "

Such differing views leave trying to work out which banks they should use for day-to-day services after Brexit

routinely request banks for a "proposal" to handle cash management for up to a decade, well beyond Brexit in 2019.

Bankers attending the ACT conference said it was clear from the vaguer requests they were now receiving that were trying to find out what services a bank could offer after Brexit - and what a bank's other clients were doing.

"These are trying to feel their way and getting a different view from U.S. and European banks," one banker said. "Some banks are not flexible because of Brexit."

European banks typically have operations across the EU, while U.S. lenders have tended to serve the bloc from a base in London.

Continental are not, however, worried about being cut off from financial services in London if there is a hard Brexit as there are alternatives in mainland

"is overbanked. don't really care, it's not an issue for them," a second banker said. were more concerned about tariff-free access to the market for their goods, he added.

(Reporting by Huw Jones; Editing by Mark Potter)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

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