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After the Covid Crisis British firms do not have the resilience to cope with a no-deal says CBI

June 24, 2020 3:00 PM

Extend the Brexit transition period say Lib Dems as another deadline looms

Bank of England governor urges banks to step up no-deal Brexit plans

CBI says British firms do not have the resilience to cope with a no-deal Brexit after the battering of the coronavirus crisis.

The Lib Dems said, At a time when our NHS, jobs, and the economy are already struggling, it would be unthinkable to rush through a bad deal, or worse get no deal at all.

It's been four years since the EU referendum and the UK has left the EU. Liberal Democrats are passionately pro-European and while this is a hard pill to swallow for many of us, the issues now at hand are not about Leave or Remain.

It is unthinkable that the government would rush through a half-heated deal, or worse get no deal at all. At a time when the UK could face the biggest economic crisis in hundreds of years, it is unthinkable that the government would rush through a half-heated deal, or worse get no deal at all.

Food shortages, medicines, and an unprecedented hit to jobs and livelihoods: that is what the UK is facing if we crash out of the EU without a deal.

That's why today, on the anniversary of the EU Referendum, we are calling on the government to ensure the UK does not crash out of the transition period without a deal. It is vital the government extend the transition period. With a week to go for them to do so, there is still time.

Boris Johnson's government has repeatedly ruled out seeking an extension to the transition period, with any request for a one-year or two-year extension needing to be formally lodged by the end of this month.

A government spokesperson said: "We've been clear that we want to reach an agreement with the EU this year and we are prepared to work hard to accelerate talks. This was what both sides agreed to in the political declaration.

"If we don't negotiate a Canada-style FTA [free trade agreement], we'll leave with an Australia-style relationship. Whatever happens we will be leaving the single market and customs union at the end of this year."

The Government has already indicated that the infrastructure and planning to levy tariffs on imports will not be in place for six months after January 2021.

Meanwhile:

The BBC reports that outgoing boss of the CBI, Carolyn Fairbairn said 'firms do not have the resilience to cope with a no-deal Brexit after the battering of the coronavirus crisis'. The UK is forecast to experience the worst economic downturn of any major European economy according to figures out from the OECD.

and

The Bank of England governor has urged banks to step up no-deal plans

Ending the year-long transition without a trade deal would mean the two sides trading on less attractive World Trade Organisation (WTO) terms, and have implications for banks' corporate customers across every major sector of the economy.

In a Sky News report:

Governor (BoE), Andrew Bailey, recently told bank chiefs they should intensify their readiness for a no-deal Brexit.

During a call with bank chief executives, Sky News reported that the (BoE) Governor said that they should accelerate planning for the UK ending the transition period at the end of the year without an agreement.

The instruction came as Britain's major high street banks grapple with the impact of the coronavirus pandemic on their balance sheets, with tens of billions of pounds of soured loans expected to materialise as a result of the crisis.

He has apparently told Britain's biggest lenders to intensify preparations for a "no trade deal" Brexit amid growing signs of deadlock between London and Brussels.

In his warning about a recession the BoE governor said It would have important consequences for trade because of the imposition of substantial tariffs, while sterling would also be set for a "fraught few months", analysts at JP Morgan told clients in a report this week, if there is no breakthrough in the talks before the end of the month.

and

Bloomberg reports that:

Aviva Investors say that the risk of No-Deal Brexit Is at All-Time High.

"The risks of a no-deal Brexit are probably higher now than they have been at any other point,"says Peter Fitzgerald, chief investment officer of multi-assets and macro at Aviva Investors.Markets: European Open." (Source: Bloomberg)

Sources:

To read the Lib Dems Press statement in full:

Independent: : Boris Johnson told to come clean on Food medicine shortages

Sky News: Bank of England governor urges banks to step up no-deal Brexit plans Mark KleinmanCity editor @MarkKleinmanSky

Bloomberg: Bank of England Says Lenders Must Prepare for No-Deal Brexit Harry Wilson and Lucy Meakin

BC NEWS: Firms can't cope with no deal and virus - CBI boss Simon Jack Business editor @BBCSimonJack

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