Yahoo Finance Manufacturers slam no-deal Brexit as 'economic lunacy'
Britain’s biggest manufacturing group has called on the next Prime Minister to rule out the possibility of a no deal Brexit in October.
Stephen Phipson, chief executive of Make UK, said it would be “the height of economic lunacy to take the UK out of the EU with no deal in place.”
“The race to the bottom in the interests of party ideology has to stop otherwise there will be a heavy price to pay,” Phipson said in a statement on Monday.
His plea comes just days after Britain’s biggest business group issued a similar call for the next Conservative Party leader to rule out a no deal Brexit. Carolyn Fairbairn, the CEO of the Confederation of British Industry (CBI), said on Friday that a no deal Brexit would do “severe” damage to UK businesses.
UK Parliament has in the past voted to rule out a no deal Brexit but Theresa May’s resignation as Prime Minister last month has fuelled fears that Britain could still end up leaving without a deal.
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Boris Johnson, the favourite to replace May as leader of the Conservative Party and Prime Minister, has said he would renegotiate the Brexit deal but would make sure the UK leaves by the October 31 deadline with or without a deal. Dominic Raab, another leadership candidate, has also backed this position, while third leadership hopeful Esther McVey has said the UK needs to “actively embrace leaving the EU without a deal.”
The warning from Make UK, formerly known as the Engineering Employers’ Federation (EEF), comes as a survey of the business group’s members conducted with BDO showed slowing momentum.
Total order balance halved from +16% in the first quarter of 2019 to +8% in the second, while output declined from +22% to +17%.
“Whilst the data at first glance makes for reassuring reading there is a clear weakening trend which, if it continues, would push some elements of industry over the edge before too long,” Phipson said.
“Earlier this year there was clear evidence that industry was on steroids as companies stockpiled. Underneath, however, there is now growing evidence of European companies abandoning UK supply chains, whilst Asian customers balk at the unknown of what may exist as the UK leaves trade agreements which operate under EU rules.”
READ MORE: Even if British Steel is rescued, problems won't be over
Last week the Society of Motor Manufacturers and Traders warned that the uncertainty surrounding Brexit was causing “untold damage” to the auto sector.
Make UK forecasts that UK manufacturing will grow by just 0.2% this year and 0.8% in 2020. The group represents over 20,000 UK manufacturers.
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Oscar Williams-Grut covers banking, fintech, and finance for Yahoo Finance UK. Follow him on Twitter at@OscarWGrut.
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