Leaving EU without a trade deal would open economic “Pandora’s Box”, CBI warns

Exiting the EU without a trade deal would be “not only wrong but irresponsible”, the head of the Confederation of British Industry has said.

His intervention comes after Theresa May’s vow to leave the EU single market and customs union. The Prime Minister has said that “no deal would be better than a bad deal”.

Speaking at the Lord Mayor’s Business and Investment dinner in London, CBI president, Paul Drechsler, said falling back on World Trade Organisation (WTO) rules would unleash an economic “Pandora’s Box” on the British economy.

Drechsler warned that British companies would face tariffs on 90 percent of their EU exports, as well as a dizzying array of new regulations.

He condemned those advocating walking away from the negotiations without a deal.

Drechsler said: “To those whose first and only choice is for Britain to walk away without a deal, I say you’re not only wrong but irresponsible.

“We should be under no illusions about what this would really mean.

“A ‘no deal’ scenario would open a Pandora’s Box of economic consequences.”

The triggering of Article 50 later this month is causing deep unease within the business community, Drechsler explained.

Some businesses are already preparing for a “worst case scenario”, he said, while others are unable to do so because of costs.

“Right now, it feels like we’re just reaching the top of the Article 50 rollercoaster. Any minute now, maybe next week, maybe the week after that we’ll suddenly drop into the twists and turns of negotiations,” Drechsler said.

“Here in the UK and across the continent firms are worried about (a) ‘worst-case scenario’. Some are getting ready for it to reduce economic damage. Some won’t prepare because they’re hoping for a deal.

He added: “But in reality many firms can’t prepare because the cost of change is simply too high to even consider it.”

Earlier this week the British Chambers of Commerce said Brexit should be postponed if a EU trade deal isn’t agreed by 2019.