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The uncertainty generated by the UK’s Brexit vote is the biggest single risk facing European businesses, according to survey of the continent’s companies in a major electoral year.

Of the 600 companies surveyed by Swiss investment bank UBS, Brexit was cited by 28 per cent of respondents as the event that will have a “negative effect on their business”, ahead of 27 per cent citing the Trump administration and 14 per cent over the French and German elections this year.

Three quarters of the firms have investments in the UK, with over half (56 per cent) saying they would respond to events in the Brexit talks “quickly”.

With EU leaders warning Britain’s economy is in line to suffer the biggest economic hit from the withdrawal, 54 per cent of businesses said they were not planning to make any changes to their UK investments after the Leave vote.

Still, a quarter said they would cut back spending “somewhat”, and 8 per cent said the would reduce investment “significantly”.

The UK is expected to trigger the Article 50 process that will kick start two years of EU exit talks at the end of this month. Prime Minister Theresa May has insisted the government is prepared to accept “no deal” if the trade and divorce settlement conditions set out by her EU partners are too tough.

UBS’s Evidence Lab survey found over 40 per cent of eurozone companies in Britain would seek to relocate part of their business from the UK to the continent; of this, 10 per cent said they would pull back a “large amount” in capacity terms. The eurozone is in line to be the biggest beneficiary of the shift with just under half of companies saying they would relocate to the single currency area.

“Consumer companies seem to favour the eurozone more than industrials and materials. SMEs also have a strong focus on the eurozone, whereas larger companies have a more diversified geographical approach”, found UBS.

Eight months after the referendum, the survey found most companies would wait within six months to a year before deciding on their UK investment plans (see graphic).

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