The majority of UK firms experienced some form of trade disruption following Brexit, and many expect there to be long-term disruption as a result of the new EU trading arrangements.
Three-quarters (75%) of businesses have experienced some Brexit trade disruption and almost half (49%) say they expect some sort of disruption to continue in the long-term, new research from EY and London First has found.
London, with its high proportion of regulated industries including telecoms, finance, accounting, legal, and IT, has been badly affected by Brexit, with 85 per cent of businesses based in the capital reporting some form of disruption.
More than half (53%) of London businesses expect the disruption to continue for the long-term. Firms in the capital are also feeling the impact on people, with 69 per cent affected by the new business visitor rules.
The long-term disruption fears come despite 71 per cent of firms having previously said they felt they were prepared for the end of the transition period.
Jon Dickie, acting chief executive of London First, said the UK must redouble its efforts to fix Britain’s trading relationship with the EY.
Cost to business and consumers
The three most common areas where firms have seen disruption are to customs and supply chains (72%), tax and VAT (70%) and regulation (68%).
Some of the challenges highlighted also include delays to getting goods to destinations (43%), having to re-register with regulatory bodies in the UK and EU (37%) and dealing with changes in contracts (38%) and data (34%).
Nearly a third (29%) of UK businesses said they have stopped trading with the EU and countries not covered by rollover agreements because of the changes.
As a result of trade changes with the EU, the process of trading has become more expensive for both consumers and business owners.
Nearly a third (29%) of the changes mentioned have led to cost rises, with half (49%) of businesses planning to pass those costs to consumers.
Sally Jones, EY’s trade strategy and Brexit lead, added: “For businesses operating in, and across, the UK [Brexit] has created significant disruption and challenges to how they operate and trade.
“By outlining these challenges, we hope to help inform policymakers so that when engaging with businesses they highlight where more focus is needed as the trading environment evolves and additional trade agreements are agreed.”