Financial services could see costs and tensions rise in the event of a No-Deal Brexit, according to new government reports.

 

The Brexit deadline is edging closer. With the UK and European Union stuck in a political stalemate, Members of Parliament have been forced to seriously consider the repercussions of a No-Deal Brexit. Technical notices published by the government yesterday covered the possible consequences of such an outcome. These notices concerned 24 areas, ranging from the nuclear industry to the effects on farming.

For financial services, the government acknowledged a widespread collapse in cross-border trade if no deal is reached. If the UK is forced to default to World Trade Organisation terms, prices on consumer goods could increase and trade relations could implode.

The financial sector was heavily impacted by the outcome of the Brexit referendum. Financial institutions such as Goldman Sachs almost immediately halted business with the UK, moving its branches to elsewhere in Europe. Banks and other financial firms have either followed or jumpstarted constituency deals in the subsequent months.

 

David Lidington, Mrs May’s deputy, made clear that hopes of securing a deal at the October meeting of the European Council were fading fast. He said: “I’ve seen enough of these negotiations to know that these deadlines slip. I think there will need to be an agreement by the end of 2018.”

Other sectors could soon face a similar fate. Consumer businesses could be hit hard by costlier card payments between the UK and the EU, as well as a steep rise in borrowing. In a letter addressed to Treasury chairwoman, Nicky Morgan, Chancellor Phillip Hammond detailed the fiscal consequences of a No-Deal Brexit. The Chancellor predicts GDP value to reduce by 7.7 per cent over 15 years, adding £80 billion to borrowing by 2033.

Business owners cannot allow this UK/EU tug-of-war to threaten their chance for success. Whether the UK reaches a deal or not, businesses must ensure their own survival.

At the Credit Protection Association, we champion a shrewdness in business and discourage complacency. Our credit monitoring service is a major selling point for our Members, allowing them to sidestep major financial disaster. We provide our Members with comprehensive online credit reports, offering vital County Court Judgment data and credit ratings on millions of businesses across the UK.

With the British business landscape uncertain and unstable, it is imperative that businesses take control of their own financial future.

Please call us on 0330 053 9263 to discuss how CPA can help your cashflow.
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