Most firms are worried about a further economic shock if the UK leaves the EU without a trade deal, according to a new study.

The CBI said its research suggested that three out of four businesses are concerned about the impact of a non-negotiated exit from the UK’s biggest trading partner.

A survey of 752 firms made it clear that most have neither the time nor resources to prepare for a non-negotiated EU exit, said the business group.

The CBI said its survey also revealed that business preparations for the end of the transition period have stalled or gone into reverse since January.

Around 15% of businesses said they have improved their preparedness for the UK’s exit from the Single Market and Customs Union, 58% report no change and one in five fear preparations have gone backwards.

Dame Carolyn Fairbairn, director general of the CBI, said: “Recent progress shows what’s possible in these vital negotiations, despite the challenge of the pandemic.

“An ambitious deal with the EU is essential to shield firms from a further trade shock at a time when they are least equipped to cope.

“What’s clear from this wide-ranging survey is that the majority of firms have neither the time nor resources to prepare for a non-negotiated EU exit.

“While many larger firms have long had plans in place for a no-deal outcome, smaller firms will struggle to cope with a double dose of disruption. The same is true across the Channel, with EU companies’ preparations also hit hard by the pandemic.

“Businesses on both sides are desperate for a deal that protects their economies at this most precarious of times.

“A deal that supports the UK’s world leading services firms and keeps UK exporters free from red tape, costs and new trade barriers is paramount as the UK takes its all-important steps towards recovery.”