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Business leaders have warned Boris Johnson that the British economy is ill-prepared for a no-deal Brexit, while businesses face serious disruption from the coronavirus pandemic.
Business groups called for an urgent resolution in the Brexit talks after the prime minister told UK companies to prepare to trade with the EU on “more Australian-like” terms – a code to go. without an agreement and relying on the terms of the World Trade Organization.
Carolyn Fairbairn, CEO of CBI, said: “After four years of negotiations and so many obstacles crossed, this is not the time to give up. Neither side can afford to fall over the final fence. An agreement is the only outcome that protects livelihoods affected by Covid at a time when all jobs in all countries count. “
Mike Cherry, national president of the Federation of Small Businesses, said companies were not prepared to face a no-deal Brexit with just 10 weeks to go before the end of the transition period at the end of December.
“They are being told to simultaneously prepare and manage a new set of Covid restrictions. Many just don’t have the time or money to make adjustments, even if they want and need, ”he said.
The pound fell in international currency markets after Johnson’s televised intervention, sliding from a high of $ 1.2956 against the US dollar on Friday morning to a low of around $ 1.2869, before gradually recovering. your losses. The coin also sold against the euro, falling from € 1.1050 to a low of around € 1.0991 before starting a recovery.
The fight over the currency came after Ursula von der Leyen, president of the European Commission, said that talks would continue next week in London, prompting bets among global investors that a compromise could still be reached. .
Analysts said the UK prime minister’s statement was a choreographed piece designed to force the EU to back down, but warned that the chances of no deal increasing.
Neil Wilson, chief market analyst at financial trading platform Markets.com, said: “This is not entirely a hoax: the UK will not take any deal through clenched teeth because politically Johnson is receiving so much criticism for the pandemic that he is not has room for “. ‘disappoint the country’ by Brexit. “
Though time is tight, he said an agreement could still be reached at 11 o’clock, suggesting that an informal meeting of heads of state in Berlin on November 16 could be the tipping point.
Ian Wright, chief executive of the Food and Beverage Federation, said a no-deal Brexit would seriously disrupt business, damage food safety and raise prices in stores for consumers.
“The prime minister’s statement indicates that we are heading into very dangerous territory. The dangers of a no-deal exit for food and drink manufacturing in Britain remain as real as ever. We need leaders from both sides to find a way to overcome the current deadlock to move the talks forward, “he said.
Earlier this week, the Organization for Economic Cooperation and Development warned that a disorderly Brexit would threaten Britain’s economic recovery from the coronavirus pandemic.
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The group, which represents more than 30 of the world’s most advanced economies, said that if a free trade agreement is not reached before the UK leaves the Brexit transition period at the end of December, the economy would be left a 6.5% lower in the next few years than it would. it would have been the case if the existing agreements with the EU had been maintained.
Warning that companies were ill-equipped to deal with the disruption after more than six months responding to the Covid emergency, the OECD said that a disorderly exit would have the most significant impacts for manufacturing, with the automotive industry being the producers of UK food and textiles are the most affected suffering a drop in exports of more than 30%.
Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said: “ With the economy still reeling from the effects of the coronavirus crisis, the prospect of a potentially chaotic exit from the EU will be difficult for companies in difficulty to bear. ”
