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BoE governor tells banks to prepare for no-deal Brexit

BoE governor tells banks to prepare for no-deal Brexit

Business
The governor of the Bank of England (BoE) has told Britain's biggest lenders to intensify preparations for a "no trade deal" Brexit amid growing signs of deadlock between London and Brussels.Sky News has learnt that Andrew Bailey said during a call with bank chief executives on Tuesday 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. ...
No-deal Brexit would push borrowing above £100bn, IFS warns

No-deal Brexit would push borrowing above £100bn, IFS warns

Business
A no-deal Brexit would see government borrowing rise to almost £100bn a year and overall debt reaching levels not seen since the 1960s, a leading economic think-tank has warned.Analysis by the Institute for Fiscal Studies (IFS) predicted a mini-boom in public spending, funded by the extra borrowing, to help soften the blow if the UK crashes out of Europe without a deal. But the boom would likely be followed by bust as the government struggles to cope with the consequences of a smaller economy and higher debt on its funding of public services, the IFS said.The findings were published in the think-tank's "green budget" setting out the issues likely to be facing the chancellor Sajid Javid as he prepares his first budget.It also contained analysis from economists at the global investment bank
PSA boss compares no-deal Brexit to train crash

PSA boss compares no-deal Brexit to train crash

Business
The head of the car group that owns Vauxhall has compared a no-deal Brexit to a head-on train crash.PSA chief Carlos Tavares also said if a no-deal Brexit had serious consequences for the car group, there would be an ethical responsibility to protect employees outside the UK.He said the firm would take "necessary decisions" regarding PSA's UK plants.PSA also said it had halted investment at its UK factories while the outcome of Brexit remains unclear.Mr Tavares, who was speaking at the Frankfurt motor show on Tuesday, has warned previously that Vauxhall plants at Ellesmere Port and Luton were under threat from Brexit.'Jobs at stake'Mr Tavares castigated politicians on both sides for failing to find a solution to Brexit. Sending t...
Pound rallies while CBI welcomes ‘chink of light’ over no-deal Brexit

Pound rallies while CBI welcomes ‘chink of light’ over no-deal Brexit

Business
By John-Paul Ford Rojas, business reporter The pound has enjoyed its best two-day rally in ten months as investors and business groups welcome the vote by MPs to try and stop a no-deal Brexit.The CBI described the cross-party alliance's victory over Boris Johnson as a "small chink of light for business" but warned that uncertainty would continue to hold back investment. Carolyn Fairbairn, director-general of the lobby group, called for a "spirit of compromise" in Westminster to avoid an economic crisis.Her reaction came as the pound added to gains seen on Wednesday as the House of Commons backed a law to try to avoid a no-deal scenario, reaching its highest level since the end of July.Ms Fairbairn said: "From the political turmoil a sma...
Bank of England: No-deal Brexit not as bad as we thought

Bank of England: No-deal Brexit not as bad as we thought

Business
The negative impact of a no-deal Brexit will not be as severe as originally thought because of improved planning by the government, businesses and the financial sector, the Bank of England has said.Governor Mark Carney told the Treasury select committee that the Bank now believes GDP will fall by 5.5% in the worst-case scenario following a no-deal Brexit - less than the 8% contraction it predicted in last November. The Bank's revised assessment of the possible scenarios also says unemployment could increase by 7% and inflation may peak at 5.25% if the UK leaves the European Union without a deal. Image: Unemployment could increase by 7%, according to the Bank While he warned that there would still be an economic impact, with food bills...