The leader of Harrow Council has described the possibility of a ‘no deal’ Brexit as a “disaster” for businesses in the region, following an industry report.

Analysis from the Federation of Small Businesses (FSB) suggested that many companies across the country are “entirely unprepared” for a situation where the UK and the EU fail to reach a withdrawal agreement.

It found that just one in ten businesses see a no deal Brexit as a positive, while only one in seven (14 per cent) are prepared for the possibility.

On the other hand, nearly half of those surveyed (48 per cent) believe it will have a negative impact on their business.

This figure jumped to 66 per cent for those who trade with the EU and 61 per cent for those who employ someone from the bloc.

And Cllr Graham Henson, leader of Harrow Council, believes it is vital that at least some sort of deal is brokered before March 29 next year.

“A no deal Brexit would create an uncertain future and be disastrous for business,” he said.

Small businesses contribute 30 per cent of the local economy in Harrow, and the borough has a traditionally high level of self-employment.

Mike Cherry, national chairman of the FSB, explained that a no deal Brexit would seriously harm those who rely on a relationship with the EU.

“It is deeply troubling that the prospect of a no deal Brexit is seeing many small firms shelving business decisions, pausing investment and more drastically, thinking about cutting staff,” he said.

“The concern is that with only six months to go before exit day, we are now in a race against the clock to avoid a situation where we crash out of the EU causing significant damage to our smallest businesses. This must be avoided at all costs.”

Prime minister Theresa May previously said that Britain must “continue the work of preparing for a no deal” if there is limited progress during discussions between the two parties.