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How prepared are North East and Yorkshire businesses for Brexit?

Michel Barnier, the EU’s chief Brexit negotiator, piled further pressure on Britain’s divorce from Europe this week, demanding to see some answers from Theresa May’s government within the next five days.

With Brexit talks hastening, a new YouGov survey ‘the Brexit Monitor’ is investigating how prepared middle market businesses are ahead of the EU-exit.

Surveying more than 300 UK mid-market companies with a turnover between £30-£300m across a range of key sectors, research has reportedly found that over two thirds (68 per cent) of North East and Yorkshire businesses are in fact prepared for the UK leaving the EU.

Almost nine in ten (88 per cent) North East and Yorkshire companies reported they had taken measures such as increasing productivity and efficiency (41 per cent), reviewing the status of EU workers (41 per cent) and increasing local recruitment (32 per cent).

Over a quarter (26 per cent) said they planned to move some operations outside of the UK, while only 9 per cent said they had established, or would look to establish, EU subsidiaries or branches.

Half (50 per cent) of the North East and Yorkshire respondents thought that an EU-exit would have a negative impact on the UK economy in the next five years, compared to 41 per cent taking a more positive view.

By way of comparison, 55 per cent of London businesses were positive about the economic impact on the country compared to 37 per cent who were negative – highlighting a difference in opinion from regional businesses in the North East.

Over a third (38 per cent) saw new overseas markets as a current strategic objective. In addition, 32 per cent were positive about demand in existing markets and over a quarter (29 per cent) see technology as a positive enabler for strategic growth.

Key concerns for North East and Yorkshire businesses were exchange rates, wage inflation (29 per cent) and political change (26 per cent).

Kevin O’Connor, RSM’s regional managing partner in the North East and Yorkshire, said: “In one of the most unpredictable operating environments since the economic downturn, middle market businesses in the North East and Yorkshire appear to be split regarding what impact Brexit will have the economic future of the UK.

“However, it is encouraging to see regional businesses on the front foot and preparing for change to ensure the North East and Yorkshire regions are well placed to succeed post Brexit.

’The evident divide highlights that decision makers in the North East and Yorkshire take opposing views on whether the UK will adapt and emerge stronger from an EU-exit.

“Whether this view will change during the course of the negotiations remains to be seen, but initial signs highlight a mixed picture.’

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