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Business leaders have welcomed approval for Theresa May's draft Brexit agreement, but it should not be allowed to derail the chances of a deal.
The Confederation of British Industry (CBI), Britain's leading business lobby group, said on Wednesday night the move was "a step back from the cliff-edge".
The pound and euro rose on the news. The pound was a shade higher at $ 1.2998 after peaking at $ 1.3072 on Wednesday. The euro added 0.15% to $ 1.1325. Ray Attrill, the head of currency strategy at National Australia Bank, said: "We are in the process of winning the game.
Asian stocks up, MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.15%. The index had decreased 0.4% the previous day as it was growing. Australian stocks rose 0.15% while Japan's Nikkei shed 0.5%. However, stock market earnings in Asia were limited after Wall Street extended its recent decline. The S & P 500 fell as a result of a tightening of US banking regulations.
CBI's Director-General, Carolyn Fairbairn, said after May's firm deal: "After 20 months of debate, this agreement by cabinet is progress. It moves the UK to the backdrop of the nightmare. Securing a transition period has been hitting the most vulnerable hardest.
"Time is now up. This deal is a compromise, including for business, but it offers that essential transitional period as a step back from the cliff-edge. "
Before the details of the deal were released on Wednesday night, lobby groups including the Institute of Directors and the British Retail Consortium said any degree of certainty about Britain's future relationship with the EU, no matter how hazy, would help businesses.
Stephen Jones, chief economist of the UK, said: "Securing an agreement text on the withdrawal agreement is an important step forward in avoiding a damaging and disorderly exit. the European Union. However, the hard work needs to continue. The country 's economic future depends on politicians showing pragmatism over ideology and having an honest debate about the true cost of leaving the EU without a deal in place.
"The finance industry will continue planning to minimize any disruption from a no-deal scenario, until the agreement has been ratified on both sides of the channel. It is vital that both the EU and UK continue to work on critical critical cliff-edge issues … The future framework shows important progress has been made in defining the nature of the UK's long-term relationship with the EU. These commitments must be secured to ensure we can enable meaningful future cross-border market access in financial services. "
Business leaders still fear the political infighting could stymie the deal, leaving the UK to crash out of the EU with no agreement in place.
Helen Dickinson, the chief executive of the British Retail Consortium (BRC), said the draft agreement was a "welcome step towards a deal", adding that retailers "urgently need certainty as we approach the date of the UK's departure from the EU".
She added: "It is vital that we avoid the cliff of no deal in March 2019"
Following the cabinet agreement, Stephen Martin, the Institute of Directors Director-General, echoed the BRC in urging politicians on the sides of the Brexit argument to their disagreements allow the UK to end up crashing out with no deal.
He said: "We are all politicians to think long and hard about how they react to this first-stage agreement. Leaving the EU without a deal is a very bad outcome for businesses, workers and consumers, and this is simply an inherent risk that comes with voting down any withdrawal deal. Our members will adjust to a new relationship with the EU, but they must be allowed to do so as smoothly as possible.
"We are looking forward to the future framework statement. But we are also grateful for the fact that we have made the transition to the transition period, which may be necessary to avoid the deployment of the backstop economic partnership has been agreed. "
