Britain needs "all-encompassing" free trade deal with EU, says CBI

DAVOS, Switzerland, Jan 17 (Reuters) - Britain must do everything it can to agree an all-encompassing free trade arrangement with the EU in its Brexit negotiations and make sure the country does not fall back on WTO rules, the head of the Confederation of British Industry said on Tuesday.

Carolyn Fairbairn, director general of the CBI, told Reuters she welcomed the clarity on Brexit offered by Prime Minister Theresa May in a speech earlier on Tuesday but warned it was a "very major step" to leave the EU's single market.

"It is very important now that we go into these negotiations aiming for an all encompassing free trade arrangement and do whatever can be done to head off the risk of falling back into WTO regulations," she said.

She (Munich: SOQ.MU - news) said it was important to understand the needs of the different parts of the British economy, but May should take a "whole-economy approach" rather than giving priority to certain sectors in the negotiations.

"If any sector is left behind the knock-on effect for other sectors of the economy is very serious, so we would favour a whole economy approach to the negotiations," she said. (Reporting by Elizabeth Piper, Editing by Kylie MacLellan)