(Editor's note: The views expressed here are those of S&P Global Ratings Senior Director Paul Watters, adapted from a speech he gave at the 2017 Annual U.K. Corporate Treasurers’ Conference on May 16, 2017, in Manchester.)
- Significant uncertainty over (at least) the next two years will prevail as negotiations over Brexit with the EU play out, with some risk of no agreement.
- Our base-case view, however, is for an orderly transition to a new comprehensive relationship with the EU, albeit requiring a transition phase to finalize and implement future arrangements.
- Meanwhile, there is a real opening for U.K. business to develop closer trading relations with faster-growing non-EU economies.
- This will require increased commitment to public and private investment and R&D in the U.K., given the likelihood of lower FDI into the country.
- The development of a highly skilled workforce will become even more important, as will the ability of companies to recruit necessary employees overseas.