No-deal Brexit: Even as the exit date draws closer, little is clear on how Britain and the EU will continue to do business with each other.
Brexit: The UK is due to leave the European Union on March 29, 2019. Even as the exit date draws closer, little is clear on how they will continue to do business with each other. Mark Carney, Governor, Bank of England, told ministers in a cabinet briefing that in the case of a “no-deal Brexit”, Britain’s property market would crash and mortgage rates spiral up, with house prices falling 35% over three years, a Reuters report said quoting a British newspaper.
So far, there is no full exit agreement between Brussels and London. The situation is such that some rebels in Prime Minister Theresa May’s Conservative Party have threatened to vote down if she settles on a deal. Carney has warned ministers, including May, that the impact of a chaotic no-deal Brexit could be as catastrophic as the 2008 financial crisis, said the report.
What is ‘no-deal Brexit’?
A “no-deal Brexit” means the separation of the United Kingdom from the EU with the absence of an agreement in place on how to continue doing business with each other. Without a deal, seamless trade between Britain and the EU will give way to basic World Trade Organization tariffs.
Trade will become subject to border checks where now there are none. A no-deal Brexit may cause delays and could bring shortages of everything, from imported food to manufacturing components. In recent months, May’s government has underscored the disruption the move would cause to the public as well as businesses, and stepped up planning for a no-deal Brexit, the report said.
Fears of no-deal Brexit
Recently, Ralf Speth, CEO of Jaguar Land Rover, said fears of a “no-deal Brexit” and lack of clarity over Britain’s post-Brexit plans have threatened the entire operational set-up of the company. Speaking at the Zero Emission Vehicle Summit in Birmingham, Speth reiterated a previous warning over a hard Brexit scenario hitting the Tata Group-owned company’s annual profits by over 1.2 billion pounds, which might even force its exit from the UK.
The JLR CEO had issued a similar statement Back in July warning the UK government against a “bad Brexit deal”. The repeated Brexit interventions of JLR, which is the UK’s largest carmaker, came in the wake of similar statements by other manufacturing giants like BMW and Airbus, warning against a “no-deal” Brexit.