Confidence in the Brexit process

Type ‘Brexit negotiations’ into Google and you'll discover more than five million pages of information to wade through. Brexit has now been a major talking point for almost three years. It’s dominated business meetings, TV bulletins and newspaper headlines. Amid the hours of debate and speculation, we still have few facts about what our new relationship with the EU will look like. Yet businesses remain confident. 

In December, we got a first glimpse of our divorce terms as phase one of talks ended. Progress was made on the cost of the settlement, the future of the Irish border and the rights of EU and UK citizens. For now, businesses appear appeased. RSM’s quarterly Brexit Monitor shows 54 per cent of middle market leaders are confident that the UK government will secure a good Brexit deal – up from 44 per cent in the weeks before the first phase of talks ended. [1]

Simon Hart, RSM’s Brexit lead partner, said a sense of optimism is now building. ‘Despite the challenges that EU negotiations continue to present, and the uncertainty surrounding our future trading relationships with the EU, an agile and pragmatic middle market is gaining confidence in the government’s ability to deliver a good deal,’ he said. 

With talks now turning to trade negotiations, will this optimism continue? Can negotiators secure preferential treatment with the EU while also forging new links with others around the world? And with the risk of protectionism and trade restrictions becoming real possibilities, will we even be able to negotiate beneficial bi-lateral deals post-Brexit?

Top five preferred trading partners

United States France Germany China Spain
31% 28% 27% 19% 11%

We know that the middle market hope for this outcome. Our research shows that businesses would like to see the UK form strong links with the key European markets, including France, Germany and Spain, as well as nations further afield like the United States and China. But, given the choice between a trade deal with the EU or bilateral agreements with countries further afield, 56 per cent would choose the EU. 

The next few months will be crucial, setting the trading tone for the UK and EU for generations to come. The pressure is on to secure a deal that allows us to forge a strong relationship with Europe, without hamstringing our efforts to become part of new trading blocs around the world. It will be another year before we know for certain whether renewed confidence in our negotiating teams is founded.

[1] Respondents were asked to rate their confidence on the UK’s prospects of getting a could deal on a 0-10 scale, where 0 is ‘very unconfident’ and 10 is ‘very confident’. Respondents scoring 0-3 are considered ‘unconfident’, and those scoring 7-10 are considered ‘confident’.