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British businesses set to welcome UK's post-Brexit free trade deal: CBI

British businesses welcomed U.K. Prime Minister Theresa May's pledge to secure an all-encompassing free trade arrangement, according to the director-general of the U.K.'s largest business organization

U.K. Prime Minister Theresa May outlined the country's plans to make a clean break from the European Union (EU) on Tuesday. In a wide-ranging speech, May confirmed the U.K. is destined to leave the single market and that a potential Brexit deal with the EU would require a parliamentary vote.

"I think (the idea of a transitional Brexit) is very welcome, it is something that the CBI and our members have been arguing for a while now... the danger of that sudden cliff-edge change is damaging for business so the commitment to an interim period (or) an adjustment period is extremely welcome," Carolyn Fairbairn, director-general of CBI, told CNBC on Tuesday in Davos, Switzerland.

Jason Alden | Bloomberg via Getty Images

"I think (May) needed to get out and lay out the road map and I think she did a pretty good job with that," Nariman Behravesh, chief economist at IHS Markit told CNBC on Tuesday in Davos, Switzerland.

"She's fairly clearly said, okay here is where (the U.K.) is going and surprise, surprise... the markets reacted (and) they cheered so in that sense there is more certainty now which is a good thing," he added.

Sterling was up by more than 2.7 percent against the U.S dollar in mid-afternoon trade on Tuesday following Theresa May's Brexit speech, putting it on track for its biggest daily increase since 1998.

Meanwhile, the FTSE 100 was down more than 1 percent and was in danger of posting its biggest one-day loss since November 2016.

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