The Chancellor has tried to reassure British companies that the UK will remain closely aligned with the EU after Brexit and won’t diverge from its rules and standards unless “it [is] in the interests of British businesses”.

Speaking at a business leaders lunch in Davos, Sajid Javid insisted it would be “democratically wrong and economically not in our interest” to automatically adopt future changes to EU regulations.

“We are leaving the EU, the single market and the customs union,” Javid said.

“And we are doing that so we can have control of our rules and laws”.

But the Chancellor promised “we won’t diverge for the sake of it”.

This matters because the government has pledged to protect the trade that currently flows between the UK and the EU post-Brexit by negotiating a “deep, comprehensive free trade agreement” with the European Union in the coming months.

Philip Jansen, the chief executive of BT, said Mr Javid's speech 'made a lot of sense'

Its ability to do that will depend on the UK’s willingness to march in step with EU regulations.

The EU has already indicated that it is willing to offer the UK zero tariffs and zero quotas on goods in return for binding commitments to follow EU rules on workers rights, state aid and environmental standards.

Businesses in some sectors worry that the UK’s desire to reserve the right not to follow EU rules in future will reduce the access the EU is prepared to offer to its markets.

Aerospace and pharmaceutical companies, food and drink manufactures and car-makers are vulnerable if the government fails to deliver on its pledge to secure a close trading relationship with the EU.

John Neill, the chief executive of Unipart which supplies parts to the likes of Jaguar Land Rover and BMW, gave the Chancellor’s speech a cautious welcome.

John Neill, the chief executive of Unipart, gave the Chancellor's speech a cautious welcome

“We hope [the government] listens carefully to what auto industry needs to stay competitive because if we can't be competitive then we become uninvestable, and if we become uninvestable then the consequence for jobs and public sector tax revenues are really, really serious” he told ITV News.

Philip Jansen, the chief executive of BT, said the Chancellor’s position on divergence “made a lot of sense...he doesn’t want to be a rule-taker which is a good thing”.

Trade talks will begin in earnest after Brexit happens in on January 31.

Carolyn Fairbairn, Director General of the CBI called for more detail

Businesses are hoping that the government, empowered by a landslide election victory, will negotiate effectively, but some are preparing themselves for significant changes to the way they trade.

“The message to government is: we understand the direction of travel, now get us detail,” said Carolyn Fairbairn, Director General of the CBI.

“Get on with negotiating a deal so we know what customs rules are, rules of origin, tariff rates.

"Get practical.”

Businesses still don’t know what they need to prepare for when the transition period ends in December.

In private, while they’re persuaded that a trade deal is doable, they doubt it will be deep or comprehensive in the way the government promises.