Business leaders have warned Boris Johnson that securing a Brexit deal is essential for safeguarding Britain’s economic recovery from the coronavirus outbreak and avoiding higher prices in the shops for British consumers. Sounding the alarm after the prime minister said no deal would be a “good outcome” for Britain and confirmed plans that could undermine the government’s commitment to the EU withdrawal agreement, business groups said failure to compromise in talks this week would severely damage Britain’s fragile economic recovery.
Allie Renison, head of Europe and trade policy at the Institute of Directors, said few companies would welcome the prospect of no deal. “Even among our members who want to diverge from EU rules, the majority say reaching a deal is important for the economy,” she said. At the outset of a tense week of negotiations between London and Brussels, reports that the UK government could backslide on the EU withdrawal agreement signed in January sent the pound tumbling on the international currency markets. In a shift that could push up the cost of imports to Britain if the sell-off is sustained, sterling fell about 1% against the dollar on Monday to trade below $1.32, and fell by a similar amount against the euro to below €1.12.
Raising the temperature in the talks, Johnson issued an ultimatum to negotiators on Monday, saying an agreement must be reached by 15 October or Britain will walk away. However, business leaders warned that British companies were ill-equipped to cope with a no-deal departure from the transition period with the economy in the deepest recession since modern records began. Should a deal fail to be reached in time, business leaders said consumers could face higher prices in the shops as a result of border disruption, tariffs and a weaker pound driving up the cost of imports.
Manufacturers’ groups warned that Brexit stockpiles had been depleted during the Covid lockdown amid widespread disruption to businesses, and that many firms were running out of cash and time to prepare for leaving the EU. “So, the probability of a no-deal Brexit continues to increase, unfortunately.”
Source: The Guardian
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