British businesses have cautiously welcomed the prime minister’s pledge to work for a “bold and ambitious free trade agreement” with the EU as part of the Brexit negotiations, but reiterated warnings that it would be disastrous for the UK to leave without a deal.

Concerns have been rising among businesses in recent weeks that the UK could be heading towards a hard Brexit that would mean paying World Trade Organisation tariffs of about 5% on imports and exports with Europe.

The EEF, the manufacturers’ organisation, said on Wednesday that leaving the EU without a deal and falling back on WTO rules “cannot be an option” while carmakers said Brexit could be the most significant threat to competitiveness of the UK automotive sector for a generation.

However, these concerns were eased by Theresa May’s comments as she formally triggered the process of the UK leaving the EU.

Paul Drechsler, president of the CBI, the leading business lobby group, said: “We welcome the prime minister’s commitment to free trade and European values which should hearten those around the table and set a constructive tone at the start of the negotiations. It is in the interests of businesses across Europe to work together in absolute determination to make a success of Brexit.

“Our shared aim must be to forge a mutually beneficial deal that delivers barrier-free trade and safeguards prosperity for all. The prime minister has recognised this.”

He added that securing early wins at the negotiating table would be vital with “the immediate guarantee of the right to remain for EU citizens here and UK nationals in Europe” topping his list.

Vincent de Rivaz, chief executive of EDF Energy, which is behind the new Hinkley Point C power station, added: “As an EU national who has lived in Britain for 15 years, Brexit is not just a professional question, it’s also personal.

“I’m convinced that both the UK government and EU leaders know very well that the 3 million EU citizens in Britain and around 1 million Britons living in Europe do not want to become bargaining chips. I believe our leaders are aware of the need to avoid this situation.”

However, these messages came as the airline industry and the car industry warned of the consequences of failing to secure an agreement with the EU.

Airlines based in the EU have the right to fly to, from and within any country in the bloc thanks to the single aviation market created in the 1990s, but Britain now has just two years to renegotiate access or come up with an alternative system.

Airlines schedule flights up to a year in advance, meaning they could be forced to scrap flights in March 2018 for March 2019 and beyond, when Britain will have left the EU.

Kenny Jacobs, chief marketing officer of budget airline Ryanair, said: “There is a distinct possibility that there may be no flights between the UK and Europe for a period of time after March 2019. The best we can hope for is a new bilateral agreement between the UK and EU, however, we worry that Britain may not be able to negotiate such a bilateral deal in time for the release by airlines of summer 2019 schedules in mid-2018.”

Carmakers said the integration between auto businesses in the UK and the continent meant that the continuation of free trade was vital. Car parts can cross the Channel four times before they end up on a finished vehicle. Furthermore, almost 70% of the new cars bought from Britain come from European factories while half of Britain’s new car exports go to the continent.

Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders, said: “As a highly integrated sector that has maximised the benefits of the European single market, this is perhaps the most significant threat to the competitiveness of the UK automotive sector in a generation.

“Triggering article 50 has started a race against time to secure a deal that safeguards the future of the UK automotive industry. Government has committed to creating and supporting the right conditions for our industry to be successful. That means certainty in our relationship with our biggest market, tariff-free and open borders so products, parts and investment can flow freely, and continued influence over the regulation that governs the vehicles we build and drive.”

Hawes said that WTO tariffs, which are 10% for cars, would be the “worst foreseeable outcome”.

The pleadings came as Moody’s credit ratings agency said it expected Britain will eventually strike a deal with the EU that preserves most of their current trading relationship after Brexit.

“However, such an agreement would likely take years of negotiation, and there are clear downside risks,” Colin Ellis, Moody’s chief credit officer for Europe, said. “Substantial new tariff or non-tariff barriers, in particular, would have an adverse impact on UK sectors that trade extensively with the EU market.”

In the City, sterling hit its highest level of the day as Britain formally triggered the two-year process of exiting the European Union.

However, the rise was small, with the pound gaining 0.2 of a cent, or 0.25%, to $1.247 and still trading lower than 24 hours earlier.

Sterling has fallen sharply since the referendum, although the FTSE 100 share index of leading companies has risen more than 19%. The increase in the FTSE 100 is primarily due to companies who export from the UK benefiting from the fall in value of the pound as well as miners and energy companies benefiting from a global rise in commodity prices.