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Businesses slam 'endless game of political chess' on Brexit

Oscar Williams-Grut
Senior City Correspondent, Yahoo Finance UK
Pedestrians walk past the Palace of Westminster, pictured from Westminster Bridge Photo: Getty Images

Business leaders have reacted with exasperation at Boris Johnson’s move to suspend parliament ahead of the 31 October Brexit deadline —warning the economy is likely to suffer as a result.

The UK prime minister confirmed on Wednesday that he has asked the Queen to dismiss the current session of parliament shortly after MPs return from summer recess.

Parliament is likely to be suspended between 9 or 10 September or until 14 October.

Johnson insists that the move is to allow him to put forward a new raft of legislation. However, critics claim it is a cynical move meant to give MPs less time to block a no-deal Brexit.

The pound fell as much as 1% on Wednesday in response to the news. At 12.45pm UK time, sterling was down 0.5% against the dollar to $1.2219 (GBPUSD=X) and down 0.5% against the euro to €1.1022 (GBPEUR=X).

Business lobbies representing hundreds of thousands of firms and many more jobs said the top priority should be to avoid a no deal Brexit and warned Johnson’s move to dismiss parliament made a disorderly exit more likely.

‘Disorderly’ Brexit could damage the economy

Allie Renison, the Institute of Director’s head of Europe and trade policy, said “clearly the chances of no deal appear to have elevated over recent weeks” and warned it would likely damage the UK economy.

“A majority of our members say a disorderly Brexit would be detrimental to their business but given the circumstances we continue to urge firms to make whatever preparations they reasonably can,” Renison said.

Dr Adam Marshall, director general of the British Chambers of Commerce (BCC), said businesses were sick of the “endless game of political chess, while their futures and the health of the UK economy hang in the balance.”

“Out in the real world, continuing political turbulence is taking a toll on contracts, on investment decisions, and on business confidence,” Dr Marshall said. “Three years on, the damage continues.”

Nigel Green, chief executive and founder of the financial advisory deVere Group, said dismissing parliament “will inflict further unnecessary economic damage on an already extremely vulnerable UK economy.”

“Depressingly, a recession is looming for Britain and Johnson’s highly controversial tactics seriously increase the uncertainty which will further drag on investment and trade,” he said.

“In addition, it will further batter the beleaguered pound, which reduces people’s purchasing power. Weaker sterling means imports are more expensive, with rising prices typically being passed on to consumers.”