Business leaders see pain, seek opportunity in British EU exit

Tue Jun 28, 2016 12:08pm EDT
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By Kate Holton

LONDON (Reuters) - Britain is heading for an economic disaster and Chinese investors have already pulled investments in the wake of Britain’s vote to exit the European Union, Richard Branson, the boss of Virgin Group said.

The billionaire entrepreneur said his airline-through-finance group had canceled a “very big” deal since the vote which would have involved some 3,000 jobs.

He also said some Chinese businesses were now reconsidering their business strategy in Britain. Several top economists, including at Goldman Sachs, say the referendum decision could trigger a recession within the year.

"I met with a group of Chinese businessmen yesterday morning who have invested heavily in England and who are now going to stop investing and withdraw investments they've already made," Branson told the Guardian newspaper.

Branson's comments came as other business leaders spelt out the impact of turmoil in global markets and the collapse in sterling. The pound fell to a 31-year low against the dollar following Friday's vote, but has recovered slightly.

Warren East, chief executive of Rolls-Royce, Britain's biggest manufacturer, told a conference organized by the Times newspaper on Tuesday that while day-to-day operations would not be affected, a lack of visibility was the company’s biggest challenge.

"The uncertainty will last years, not months," he said.

Rolls Royce, which supplies aircraft engines to Boeing and Airbus, generates two-thirds of its revenue outside of the 28-member bloc.   Continued...

A British flag and an EU flag are seen in front of a monitor displaying a graph of the Japanese yen's exchange rate against the U.S. dollar at a foreign exchange trading company in Tokyo, Japan, June 27, 2016.  REUTERS/Toru Hanai