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No-deal Brexit would hit UK economy, says IMF

No-deal Brexit would hit UK economy, says IMF

Business
The International Monetary Fund has warned that a "no-deal" Brexit on World Trade Organization terms would entail "substantial costs" for the UK economy. Such an outcome would affect "to a lesser extent" other EU economies. It said challenges in getting a deal done were "daunting" and warned against further UK interest rate rises. The IMF said it expected Britain's economy would grow by about 1.5% a year in 2018 and 2019 if a broad Brexit agreement was struck.Christine Lagarde, the IMF's managing director, added: "Those projections assume a timely deal with the EU on a broad free trade agreement and a relatively orderly Brexit process after that."The IMF said that all likely Brexit scenarios would "entail costs for the UK economy...
Brexit: Carney warns no-deal could see house prices plunge

Brexit: Carney warns no-deal could see house prices plunge

Business
The Bank of England's governor has warned the cabinet that a chaotic no-deal Brexit could crash house prices and send another financial shock through the economy.Mark Carney met senior ministers on Thursday to discuss the risks of a disorderly exit from the EU.His worst-case scenario was that house prices could fall as much as 35% over three years, a source told the BBC.The warning echoes some of the Bank's previous comments.The Bank of England routinely carries out "stress tests" to check whether the banking system can withstand extreme financial shocks.Its latest one was conducted in November, when it said a 33% fall in house prices could occur in a worst-case scenario. Several reports said that the Bank governor also told the Downing Street meeting tha...
No-deal Brexit threatens Jaguar Land Rover UK future

No-deal Brexit threatens Jaguar Land Rover UK future

Business
UK plants and at least 40,000 jobs are at risk if the country leaves the European Union without a free trade deal, Britain's biggest carmaker has warned. Jaguar Land Rover (JLR) has told the government that, while its "heart and soul" are in the UK, a bad Brexit could force a re-think, with a "no-deal" scenario forcing it out of the UK because of an expected £1.2bn surge in tariff costs.JLR exports 80% of its cars worth £18bn annually.Dr Ralf Speth, chief executive of JLR, said: "We, and our partners in the supply chain, face an unpredictable future if the Brexit negotiations do not maintain free and frictionless trade with the EU and unrestricted access to the single market."We urgently need greater certainty to continue to invest heavily in the UK and safeguard ...
Banks 'not prepared' for no-deal Brexit

Banks 'not prepared' for no-deal Brexit

Business
Banks' preparations for Brexit without a ratified withdrawal agreement are inadequate, the European Banking Authority (EBA) says. The EU's top banking regulator warned banks "to speed up their preparations for the potential departure of the UK from the EU in March 2019" without an agreement in place."Firms cannot take for granted that they continue to operate as at present nor can they rely on as yet unrealised political agreements or public policy interventions," Andrea Enria, Chairperson of the EBA, said.He added: "Risks, capacity and legal implications must be examined and addressed."International banks with their European headquarters based in London and British banks have been submitting applications to move some of their operations to the continent. And European banks...
UK banks 'strong enough for no-deal Brexit'

UK banks 'strong enough for no-deal Brexit'

Business
The UK's seven biggest lenders are all strong enough to cope with a "disorderly" no-deal Brexit, according to a Bank of England assessment.But the Bank said it would consider whether the firms need to make sure they hold billions more capital as an emergency buffer in case such a scenario coincides with a wider global downturn.The Bank's Financial Policy Committee also set out a wishlist of actions it says should be taken to try to mitigate the risks to UK financial services posed by the departure from the EU.For the first time since the annual stress testing regime began in 2014, all the major lenders received a clean bill of health though the weakest two - Barclays and state-backed Royal Bank of Scotland - struggled.The tests modelled a nightmare scenario under which UK GDP slumps by 4.7...