Following are excerpts from a CNBC interview with CNBC's Carolin Roth and Carolyn Fairbairn, Director General of the CBI, from the World Economic Forum 2017.
CR: We're now joined by Carolyn Fairburn director general of the CBI. Thank you so much for your time. The cat is out of the bag. Britain will not be part of the EU single market. What's your reaction?
CF: Well this is a very significant day in terms of our economy. The decision has been taken for the U.K. to leave the single market. That means that all eyes now from businesses point of view will be on the kind of negotiation we have and the kind of new free trade deal that we have. I think there will be a welcoming by business of the commitment to a new all encompassing free trade arrangement.
CR: Do you think it is a mistake by the prime minister to put this before parliament again or do you think she simply had no other choice.
CF: I think that's very much a political decision that I can see there would be pressure to do so. Businesses will be concerned to have as much certainty as quickly as possible so that will be a consideration for the economy.
CR: But there are still plenty of uncertainty for businesses going forward because now comes the very tedious stage of negotiation with the EU. And I would think that the EU is going to start at the one side of the spectrum whereas Britain of course wants clearly a favourable deal for its own country. The two sides will have to meet in the middle. And that will take some time.
CF: I think that's absolutely right that there is now a negotiation that has to play out. But one of the things I think that will be very significant will be the interests of businesses across the European Union both in the U.K. and across Europe. In terms of the benefits of free trade and that's something that we as the CBI will be keen to make the case for as we go forward.
CR: It's probably very reassuring to many businesses today is the fact that Theresa May pointed out that they hopefully will be a transition period that is if there is a deal that means the hard hard Brexit scenario that's essentially been rolled out. There won't be a cliff edge Brexit.
CF: I think that is very welcoming. It's something that the CBI and our members have been arguing for for a while now is the danger of that sudden cliff edge change is damaging for business. So the commitment to an interim period and adjustment period is extremely welcome and will be welcomed by businesses across the country.
CR: How are the companies that you're speaking to dealing with the plunge in the currency and it obviously lifts inflation expectations and I also wonder whether businesses are being forced to become more competitive. That is if they're not manufacturing and not benefiting from the plunge in the Sterling to the same extent.
CF: Well what is absolutely true is one of the biggest short term effects for the U.K. economy has been the change in exchange rates. And so you have firms who are benefiting from the manufacturing boost that they have had from the export boost that they have had a view of other firms who are having to deal with the rising import prices. I think the key point is firms are being immensely practical. They are looking very much to their own competitiveness in this new environment. And actually I think you're seeing companies thinking in new ways about how they can compete.