Amid business departures, London mayor pushes for a Brexit transition deal

Mayor Sadiq Khan warns that international companies will follow through on their promises to take their business elsewhere if a Brexit transition deal is not agreed to soon.

First Look

London Mayor Sadiq Khan joined Britain's business leaders in warning that companies would start moving jobs and investment out of the country if they do not get a transition deal soon, saying businesses were not bluffing with their concerns.

The boss of Goldman Sachs tweeted last week that he was looking forward to spending more time in Frankfurt after Brexit, and Britain's five leading business organizations warned on Monday that the threat to the economy was becoming critical.

"Just left Frankfurt. Great meetings, great weather, really enjoyed it. Good, because I'll be spending a lot more time there. #Brexit," chief executive officer Lloyd Blankfein tweeted last Thursday.

Mr. Khan, a member of the opposition Labor Party, said Mr. Blankfein's comment reflected a wider thinking in the business community and warned that others would follow suit if a transition deal was not quickly agreed to with Brussels.

"He's articulating publicly what many CEOs and investors who love working in London have been saying privately, which is that unless they have certainty about what happens after March 29, 2019, they have got to make a plan B," he said.

"He's not bluffing. When I speak to businesses each day, they're not bluffing."

Prime Minister Theresa May has promised to retain full access to the European Union's single market for two years after Brexit to limit the disruption for companies who do not know how they will trade with their neighbours in the future.

However, leading Brexit campaigners have started to call on Ms. May to walk out of the talks if Brussels does not agree quickly to move on to discuss Britain's future trading relationship, weighing on sterling and spooking businesses.

May won a brief respite on Friday when EU leaders signaled they were ready to move the negotiations forward in the coming months.

With tensions mounting, the five business groups which speak on behalf of companies employing millions of workers, have drawn up a letter to Brexit minister David Davis, warning that time is running out for companies which need to make investment decisions at the beginning of next year.

"Agreement [on a transition] is needed as soon as possible, as companies are preparing to make serious decisions at the start of 2018, which will have consequences for jobs and investment in the UK," the draft letter says, according to a person familiar with the situation.

"And the details of any transitional arrangement matter: the economic relationship the UK and EU has during this time-limited period must match as close as possible the status quo."

The letter is due to be sent from Britain's five leading business groups, the Confederation of British Industry (CBI), the British Chambers of Commerce, the Institute of Directors, the Federation of Small Businesses, and the manufacturing group, the EEF.

In a separate quarterly survey from the CBI, optimism about the business situation was shown to be at its weakest since just after last year's Brexit vote.

A spokeswoman from the Department for Exiting the European Union said the prime minister had said that an implementation period would help minimize disruption.

"We are making real and tangible progress in a number of vital areas in negotiations," the department said.

This story was reported by Reuters.