Accountants welcome Brexit transition deal but doubt grows over economy’s bottom line - ICAS

The Tracker is based on an online survey of ICAS members (Chartered Accountants) in early April, just after the provisional agreement was announced by London and Brussels, and ratified by the EU Council of Ministers.

Overall, 48 per cent of respondents said the agreement was “helpful” or “very helpful” (43 per cent said it was “unhelpful” or “very unhelpful”).

On specific elements of the agreement they were more positive (the figures in brackets represent the percentage describing the agreement as “helpful” or “very helpful”):

Over the last six months of negotiations, members’ preferences for the outcome have not changed drastically (just under 60% would still rather see the UK as a participant in the Single Market, while around 30 per cent prefer a free trade deal).

Expectations, however, have changed over the period, with 41% now expecting the UK government will secure a free trade deal (Autumn 2017: 36 per cent) and just 23 per cent predicting that the UK will leave the EU with no free trade deal in place (Autumn 2017: 29 per cent).

The Brexit Tracker indicates declining confidence, however, compared with 12 months ago. The headline numbers on the impact of Brexit (with +50 indicating a very positive outcome and -50 a very negative outcome) are, with Spring 2017 figures in brackets:

Slightly increased confidence that the UK government will achieve its stated objectives is not matched by confidence about what might happen to the economy after that.

In terms of being ready for Brexit there appears to be some progress especially for larger organisations. Of the large organisations, 40 per cent say they have considered location issues, 51 per cent have reviewed supply chain issues and 61 per cent have considered HR and regulatory issues.

Smaller organisations are less likely to have even started addressing these issues: 18% have considered location issues, 28 per cent supply chain issues, 30 per cent HR and 44 per cent regulatory issues.

Regarding economic predictions, 90 per cent of respondents now expect to see interest rates rising (with 41 per cent expecting to see the Bank of England rate reach 1.5 per cent over the next two years); views remain mixed on sterling’s prospects; and slightly fewer (65 per cent as opposed to 70 per cent in the last survey) see inflation rising.

Christine O’Neill, Chairman of Brodies, said: “It is important to remember that the agreement is a ‘draft’ and the EU has been consistent in the refrain that ‘nothing is agreed until everything is agreed’.

“The agreement is not expected to be in its final form until the autumn of this year and a number of outstanding issues need to be resolved before a final text can be put to the UK Parliament, and to the European Parliament and Council, for ratification.”

Bruce Cartwright CA, ICAS Chief Executive, said: “There are clearly many issues still for the UK and EU to deal with and the latest agreement is just one step on a long road.

“ICAS will continue to be proactive during this process, using our expertise to help clarify the key issues and sharing our members’ views with policymakers.”

Just over 350 ICAS members completed the survey.