REDCAR, ENGLAND - SEPTEMBER 29:  Dawn breaks over the blast furnace at the SSI UK steel plant on September 29, 2015 in Redcar, England. Following the announcement that SSI UK are mothballing the plant and ceasing steel production 1700 jobs at the Teesside site have been lost.  (Photo by Ian Forsyth/Getty Images)
PHOTO: Ian Forsyth/Getty Images
REDCAR, ENGLAND - SEPTEMBER 29: Dawn breaks over the blast furnace at the SSI UK steel plant on September 29, 2015 in Redcar, England. Following the announcement that SSI UK are mothballing the plant and ceasing steel production 1700 jobs at the Teesside site have been lost. (Photo by Ian Forsyth/Getty Images)
Now playing
03:28
Can a free port save this steel community after Brexit?
Now playing
01:36
Michael Bolton wants you to break up with Robinhood
Now playing
00:00
Watch the Dow live
Now playing
04:34
See what has happened to Trump's DC hotel after his loss
Now playing
01:41
Meet the 29-year-old cancer survivor set to make history in space
WASHINGTON, DC - JANUARY 15: MyPillow CEO Mike Lindell waits outside the West Wing of the White House before entering on January 15, 2021 in Washington, DC. (Photo by Drew Angerer/Getty Images)
PHOTO: Drew Angerer/Getty Images
WASHINGTON, DC - JANUARY 15: MyPillow CEO Mike Lindell waits outside the West Wing of the White House before entering on January 15, 2021 in Washington, DC. (Photo by Drew Angerer/Getty Images)
Now playing
00:39
MyPillow and its CEO Mike Lindell sued by Dominion
Bill Gates AC intv 022021
PHOTO: CNN
Bill Gates AC intv 022021
Now playing
02:32
Will Bill Gates go back to shaking hands? Hear his thoughts
02 Bill Gates AC intv 02202021
PHOTO: CNN
02 Bill Gates AC intv 02202021
Now playing
02:13
Bill Gates optimistic about climate policy under Biden WH
Now playing
05:37
Texas mayor: We were not prepared
Now playing
03:05
Watch lawmakers grill Robinhood's CEO
PHOTO: CNN
Now playing
04:47
ERCOT CEO explains how Texas power failure happened
NEW YORK, NEW YORK - OCTOBER 15: A person walks by a closed New York City business on October 15, 2020 in New York City. As American workers continue to struggle in an economy brought down by COVID-19, new jobless claims rose to 898,000 last week. It was the highest number since August 22 and represented a gain of 53,000 from the previous week
PHOTO: Spencer Platt/Getty Images
NEW YORK, NEW YORK - OCTOBER 15: A person walks by a closed New York City business on October 15, 2020 in New York City. As American workers continue to struggle in an economy brought down by COVID-19, new jobless claims rose to 898,000 last week. It was the highest number since August 22 and represented a gain of 53,000 from the previous week's upwardly revised total of 845,000. (Photo by Spencer Platt/Getty Images)
Now playing
01:11
Weekly initial jobless claims jump to 861,000
Now playing
02:42
A challenging year for women: Millions are out of work
MELBOURNE, AUSTRALIA - FEBRUARY 18: In this photo illustration a message is seen on Facebook mobile, on February 18, 2021 in Melbourne, Australia. Facebook has banned publishers and users in Australia from posting and sharing news content as the Australian government prepares to pass laws that will require social media companies to pay news publishers for sharing or using content on their platforms. (Photo by Robert Cianflone/Getty Images)
PHOTO: Robert Cianflone/Getty Images AsiaPac/Getty Images
MELBOURNE, AUSTRALIA - FEBRUARY 18: In this photo illustration a message is seen on Facebook mobile, on February 18, 2021 in Melbourne, Australia. Facebook has banned publishers and users in Australia from posting and sharing news content as the Australian government prepares to pass laws that will require social media companies to pay news publishers for sharing or using content on their platforms. (Photo by Robert Cianflone/Getty Images)
Now playing
03:05
Facebook blocks news sharing in Australia in response to government proposal
PHOTO: Anadolu Agency via Getty Images
Now playing
00:58
Watch Trump's Atlantic City casino implode
People walk by a closed restaurant in Rockefeller Center on the last Sunday before Christmas on December 20, 2020 in New York City. Rockefeller Center, where the annual Christmas tree is displayed among other holiday attractions, has far less crowds this year and numerous restrictions due to the ongoing COVID-19 pandemic. New York City has seen a slow uptick in COVID hospitalizations over the last few weeks but is still far below the numbers witnessed in the spring. (Photo by Spencer Platt/Getty Images)
PHOTO: Spencer Platt/Getty Images
People walk by a closed restaurant in Rockefeller Center on the last Sunday before Christmas on December 20, 2020 in New York City. Rockefeller Center, where the annual Christmas tree is displayed among other holiday attractions, has far less crowds this year and numerous restrictions due to the ongoing COVID-19 pandemic. New York City has seen a slow uptick in COVID hospitalizations over the last few weeks but is still far below the numbers witnessed in the spring. (Photo by Spencer Platt/Getty Images)
Now playing
03:12
These owners had to close their iconic restaurants during the pandemic
(CNN Business) —  

Businesses in the United Kingdom have already endured more than three years of Brexit uncertainty. Now, as the third deadline to leave the European Union zooms by, companies are left to grapple with a profoundly unpredictable domestic political situation that will further erode business investment.

Companies had been cautiously optimistic that Prime Minister Boris Johnson would remove the immediate threat of a disorderly break with the European Union by pushing his Brexit deal through UK Parliament ahead of the latest October 31 exit deadline. He failed to secure approval, instead seeking another extension from Brussels while demanding a UK general election on December 12.

A completed deal on Brexit, even one that harmed the economy by erecting new trade barriers between Britain and its largest export market, would have provided businesses with some of the policy certainty they have been craving. That, in turn, might have encouraged CEOs to start spending more money on equipment, factory upgrades and expansions that have been delayed because of uncertainty over Brexit.

By setting aside his deal in favor of an election, Johnson has once again plunged UK businesses into the dark about the future terms of trade with the European Union, and the rest of the world. CEOs must now consider a broad range of outcomes: UK lawmakers may grant Johnson a general election, or they may not; Johnson may triumph at the polls, or be replaced as prime minister by Labour Party leader Jeremy Corbyn. The deal Johnson struck with the European Union may eventually be revived, or it could be shelved next to the one negotiated by his predecessor, Theresa May.

One of the few certainties is another delay and more economic pain. On Monday, the European Union approved a Brexit extension until January 31.

“A delay … is not a huge blow for the economy, but by prolonging the uncertainty it’s an extra drag,” Paul Dales, chief UK economist at Capital Economics, wrote last week in a research note.

According to Capital Economics, Britain could be headed for a situation where a “zombie government” contributes to a “zombie economy and a zombie pound.” The group’s economists estimate that Britain’s economy, which contracted for the first time in seven years in the second quarter, would be consigned to sluggish growth of around 1% in 2020.

More than three years of uncertainty have already taken a toll. Business investment growth has declined for five of the past six quarters, according to UK government data. Researchers from Stanford University and the Bank of England found that uncertainty caused by Brexit has reduced investment by about 11% and decreased productivity by up to 5% over the three years since the June 2016 referendum.

Manufacturing has been particularly hard hit. According to Make UK, a trade group, nearly two thirds of manufacturers say that Brexit delays and uncertainty have had a direct negative impact on their profit margins over the past two years.

The UK Society of Motor Manufacturers and Trader estimates that investment in the auto sector was down 70% to just £90 million ($115 million) in the first six months of this year. Foreign carmakers that used Britain as a springboard to the rest of Europe have meanwhile scaled back their commitments in the country.

Honda (HMC) is planning to shut down a major factory in England that employs 3,500 people. Nissan (NSANF) has scrapped plans to build its new X-Trail SUV at its factory in Sunderland. It said uncertainty over Brexit was partly to blame. French carmaker PSA (PUGOY) has warned that continued production of the Vauxhall and Opel Astra in the UK depends on the country’s terms of trade following Brexit.

All told, companies are likely to face at least four and half years of uncertainty over Britain’s relationship with the European Union. Even the Brexit divorce deal negotiated by Johnson includes a transition period until the end of 2020 that is designed to give Britain time to negotiate a new trade agreement with the bloc.

One big problem: that probably doesn’t leave enough time to settle the huge number of complicated issues that would be included in a new trade agreement, raising the possibility that Britain would ultimately crash out of the bloc at the end of 2020 without the terms of a deal in place. For business, that outcome would be even worse than more uncertainty.