Saturday 08 October 2016 5:01 pm

British business leaders from the Confederation of British Industry and the EEF urge the government to sidestep “hard” Brexit in open letter

A group of major lobby groups from Britain's business sector has written an open letter to the government urging it to preserve barrier-free trade with Europe and avoid a so-called "hard" Brexit.

The letter, which is signed by the heads of the Confederation of British Industry (CBI) and manufacturers' organisation EEF, said the terms of the UK's exit from the EU are crucial for jobs and investment.

A Brexit agreement that leaves the UK without easy access to the Single Market should be entirely ruled out as an option, the signatories urged.

The letter also said defaulting to World Trade Organization rules could slap new tariffs on as many as 90 per cent of UK goods traded with the continent.

"We respect the result of the referendum, but the government must make sure that the terms of the deal to leave ensure stability, prosperity and improved living standards," the CBI and EEF said.

"Every credible study that has been conducted has shown that [the] WTO option would do serious and lasting damage to the UK economy and those of our trading partners."

The signatories added that the government should "give certainty to business by immediately ruling this option out under any circumstances".

CBI director general Carolyn Fairbairn, who was one of the signatories, said the letter urged the "ruling out of the really worst options, to reassure investors that the UK was still a really good place to invest".

According to a major poll published this week, business confidence has bounced back to pre-referendum levels and more than half of businesses are now optimistic about their own prospects for next year.

However, a crash fall in the value of the pound on Friday and Theresa May's increasing hints (as well of those of other leaders) that she is wavering towards a "hard" Brexit have raised uncertainty anew in the business sector.

Earlier this week, May set out her timetable for Brexit and said Article 50 would be triggered by March 2017. She also signalled that she would be prioritising immigration controls, which could come at the expense of gaining access to the EU Single Market.