BUSINESS UK BREXIT

LONDON : British business welcomed a UK plan to keep strong European Union economic ties post Brexit, even though Prime Minster Thersa May was already counting the political fallout at home.

May faced a crisis in her cabinet on Monday last, after Foreign Secretary Boris Johnson followed Brexit minister David Davis in resigning over proposals drawn up before the week-end.

British business, whose leaders have persistently called for a clear plan on Brexit, came together Monday to back May's proposals, which were heavily Clouded by the cabinet department.

Johnson's resignation caused the pound to slide.

"The departure of Mr. Johnson from the cabinet is a major blow to Theresa May's leadership, and it could call her future into question,"noted David Madden, analyst of CMC Markets UK.

Johnson has long had leadership ambitions and many believed May gave him the plum job of Britain's top diplomat to keep him from building up a domestic political power base.

Despite a divided cabinet, May on Friday won overall support for a new "free trade area" where Britain would accept EU rules for goods.

Business leaders meanwhile backed the plan.

"It is welcome that the cabinet set out an agreed to position for the U.K's future relationship with the European union,"said Catherine McGuinness, head of policy at the  City of London Corporation, a local government authority for the  capital's  financial district.

However, in a not of caution she added that a deal that excludes services, would have a negative impact on the U.K. financial sector.

The head of  Britain's main business lobby group the CBI, meanwhile called the resignation of   Davis "a blow to the plan".

But at the same time, Carolyn Fairbairn said the government was moving "in the right direction".

She added : "There will be a time when the benefits of free trade deals internationally could outweigh European trade, but it's not yet. [AFP]