Prime Minister Theresa May has pledged to address business concerns that Britain could fall off a "cliff edge" into uncertain trading conditions after leaving the EU, hinting at some form of a transitional agreement.
It is the strongest sign yet that May could be open to a deal that would offer Britain time to forge a new trading relationship with the European Union when the up to two-year formal divorce talks are concluded, most likely in 2019.
Speaking to business leaders at the CBI, a leading business organisation in Britain, May on Monday moved to ease concerns among company bosses who had been alarmed by a plan to put workers on boards and to tackle excessive executive pay.
But she would not be moved to reveal more of her negotiating hand before she triggers Article 50 of the EU's Lisbon Treaty to launch two years of formal divorce talks.
Asked about business calls for a transitional deal, she said: "I am conscious that there will be issues that need to be looked at ... that people don't want a cliff edge, they want to know with some certainty how things are going to go forward, that will be part of the work that we do in terms of the negotiation."
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EU officials say they have always assumed that Britain will need some transitional deal to bridge the gap between the withdrawal treaty and a new one setting out a long-term relationship, which they expect to take many years to negotiate.
May's words seemed to be a direct response to the president of the CBI, Paul Drechsler, who said business needed certainty over Britain's future relationship with the EU's single market and immigration rules for "European talent".
Keen to make sure her government stays on message, May has silenced her ministers, some of whom have given the strongest hints yet that she is not ruling out a form of transitional agreement with the EU.
