With a no-deal Brexit most likely happening in a couple of months, experts have warned about how unprepared many trading companies are.  Service industries, such as finance make up 79% of the British economy and account for 45% of UK exports. A no-deal Brexit means that these service providers would lose access to European markets and might have to comply to new rules and regulations. According to Bloomberg Economics, in a “more benign no-deal scenario growth will probably slow sharply, while a more disruptive outcome would make a recession highly likely.”

The prime minister Boris Johnson has pledged to leave the EU by 31 October with or without a deal. Without a withdrawal agreement in place, the UK will crash out of the EU, lose its access to the single market and revert to the World Trade Organization (WTO) rules, having to deal with complicated restrictions and tariffs on exports. For many economists and business organisations, a no-deal Brexit will simply be disastrous for the economy.

Trading post-Brexit

While the UK has enjoyed tariff-free trade, after Brexit the UK will have to pay tariffs on UK goods and services. The change will hurt the UK economy, cause delays and increase costs and controls. Particularly, many financial companies are planning to move part of their operations to Europe to counteract the loss of access to their EU “passporting” rights and secure the smooth trading of goods and services with the rest of the world.

Similarly, UK prices will increase for EU imports such as food and cars. Cars will get a 10% tariff, clothes and linen a 12% tariff, while the UK will impose import quotas on beef, lamb, fish, poultry and swine.

The Bank of England has warned that Britain has one in three chance to plunge into a recession the beginning of the next year, as uncertainty over Brexit continues to affect the economy. In this climate, British businesses are stockpiling goods or plan to do so, as a hard Brexit will create problems at ports and hurt supply chains.  

Trading companies not prepared for Brexit

Carol Lynch, partner in Customs and International trade with the accountancy group BDO, said that only half of importers and exporters have signed up for the basic trading requirement. She said: "When we are looking at client reviews in terms of planning, the first question - particularly for vendors and suppliers - is have you got an EORI number. If you haven't, that's a very good indication that you haven't given any thought to future planning, deferred planning, tariffs, haulier preparations. The EORI is the very basic requirement.” For her, both imports and exports will be seriously affected by trade barriers. Lynch clarified: "Imports are especially important for consumers and manufacturers. Goods purchased from the UK and 80% of goods coming from Europe and outside of Europe come through the UK. It's critical and we'd be working with hauliers in making sure drivers are prepared and the right paper work has been handed in. Whatever chance you have of not being delayed is based on your preparations, that you know how to complete import declaration, that it's cleared and that you have that clearance slip in the cab so the driver knows what to do when they drive off the boat. There are a number of steps to ensure you can minimise the risk of delays which are, to a certain extent, inevitable.”

According to the Financial Times, France is already preparing for a no-deal Brexit by planning to trial an electronic customs system. The trial of the electronic customs system will commence in mid-September in Calais, ahead of a possible no-deal Brexit on 31 October. French minister in charge of customs Gérald Darmanin told French radio station RTL: “For a month, we’re going to pretend there is Brexit. For a lot of companies, we are going to have a sort of dress rehearsal so that we are ready at the end of October.”

If you are an importer or exporter, you must have experienced the general pessimism and uncertainty surrounding Brexit, while you might have been affected by the weak pound. If you want to protect your business and financial transfers, contact Universal Partners FX. UPFX will offer valuable support and assistance when transferring money internationally while tailoring hedging strategies to your business’ needs. Give them a call today and find out how much you can save on your international money transfers.

Buying property abroad can be hard but is especially harder when considering the current political impasse. After the prime minister, Boris Johnson, received the Queen’s approval to suspend parliament for five weeks from early September, in a move that has been criticised as “profoundly undemocratic” and “sinister,” Brexit continues to be one of the thorniest issues in the UK.

Brexit and expats

This is why, when thinking of moving abroad, British retirees might need to firstly research and understand the complexities of post-Brexit life outside the UK.

What would a long-term residency mean, or what would be the changes to pensions for Brits abroad. For example, it is unclear whether transfers to a Qualifying Recognised Overseas Pension Scheme will be tax-exempt post-Brexit. Additionally, for anyone considering buying property abroad, the biggest issue is currency volatility and its impact on international money transfers. Once you decide to buy your property and want to transfer funds to pay for your property, you don’t want to find that your hard-earned money was significantly affected by the movement of the pound due to Brexit developments.

What to consider when deciding to purchase a property

Researching and understanding local laws regarding buying a property should be one of your first steps. The process of buying a property abroad will be different from place to place, with specific laws and regulations for foreign residents buying property. If you would like to invest in a property abroad to let it afterwards, you should most likely follow the same steps, and research the laws about renting. You don't want to spend a large sum of money on a property that will be chained to a set of rules and limitations, something that will eventually hurt your funds. While you might be looking at European countries such as Spain and France, you might as well do your research regarding other countries where housing prices, the pound's exchange rates, and the local laws are most favourable to you.

Buy to let

Investing in a property abroad that you can also let is a way to increase your income, so deciding the right location and price, and understanding its potential and rental yield are important factors. If you are unsure, discussing this with mortgage brokers, financial planners and accountants might help you decide on whether this is a good investment.

When you deal with tenants, it will be good to have a mediator such as a property manager, who will help you find the right tenant and organise maintenance issues. As long as you are prepared to maintain a property abroad and make it attractive to tenants, then you would also be prepared to pay the costs regarding maintenance and renovation.

Buying a property

Once you have decided on a property, you need to make sure that all papers are in place and all processes are transparent. Get receipts and documents to prove your transactions or agreements and never leave anything to chance. You must always get the title deeds to the property or land, so you know that you own what you have paid for. Also, you need to be aware of any outstanding utility bills or local tax from the previous owner of the property.

If you require financial help to purchase your property, you can get a mortgage, but first do your research and find the right mortgage lender for you. You will need specific mortgage from a bank that supports your chosen country. As it is a competitive market, there are lots of options for you, so get the right solution to meet your own borrowing needs.

Transferring money

When you’re buying property, you’ll need to transfer money overseas. Universal Partners FX is a leading foreign exchange specialist that can assist you with your international currency transfers and save you significant amounts of money on large transfers. UPFX will provide an affordable way to transfer money overseas and protect your funds from foreign exchange risk. Get in touch today to find out how much they can save you on your international money transfers.

Buying a property abroad can be difficult especially with the likelihood of a no-deal Brexit. But considering the advantages and disadvantages, and doing your own research wisely, you will be able to buy a property without throwing your life savings away. It will be good to discuss your property purchase with a currency specialist who will help you understand the market and offer assistance when making large or regular international transfers. This will be significant particularly due to the current political chaos in the UK. On Wednesday, Merkel gave the prime minister an ultimatum to find a solution with regards to the Irish backstop, as the pound slipped to low levels, close to the ones seen back in January 2007.

Brexit

In his meeting with Merkel, Johnson accepted the German Chancellor’s "blistering timetable" admitting that it was the UK’s burden to find a solution to the political deadlock. In his familiar humorous style, Johnson repeated Merkel's campaign slogan "Wir schaffen das," or "we can do it," causing laughter among the Chancellor and reporters.

In a Bloomberg article, it was reported that after Boris Johnson’s letter to EU officials, the French government now expects the U.K. to leave the EU without a deal, something that would immediately install border controls at the end of October.

The article notes that with Johnson becoming prime minister, EU officials believe that a no-deal Brexit would be the most likely outcome, as the UK “doesn’t have a realistic plan for an alternative to the backstop. The measure is despised by ardent Brexiteers in Johnson’s Conservative Party because it keeps the U.K. tied to many of the EU’s customs and trading rules, and Parliament has rejected the Brexit deal three times.”

Buying your dream or retirement home

Despite the political deadlock in the UK, if you have made your research and you are certain about moving abroad and purchasing your dream home, then there’s a few things you need to have in mind.

First, you should research the area of your desired property and find out the benefits of living in that neighbourhood. Are there any amenities nearby, is there access to the beach or the motorway, and generally, what is the atmosphere and feeling of the area and community? You will have to live there and, perhaps, in the future, sell the property with significant returns. So, trying to get the best deal for the best location will definitely enhance your investment in the future.

Make sure that you are not buying something you have never seen in person before. In the case that a developing company will take care of the construction of the building, but you have only saw the plans, do your research beforehand and find out whether the developers are reliable. Having a contract that guarantees that by the end of the project you will get what you were promised is the most secure way to safeguard your interests. Not only foreigners, but locals have fallen in the trap of buying a property but not the land is on, resulting in court cases and lots of stress.

Talk to the experts

From currency exchange brokers, to mortgage brokers and lawyers you will need specialist help when deciding to relocate and purchase a property abroad. In this sense, you will need to factor in costs for legal advice, taxes, notary fees, utilities, such as electricity, water, and gas connections.

Buying a property in France or Italy, 10%-12% of the property’s purchase price would go to cover government taxes and legal fees, while in Spain can go up to 12%-16%.

If you are buying property abroad, it is very important to go to a specialist such as Universal Partners FX. With the current volatility and weak pound, it is best that you contact a currency specialist as soon as you start the buying process, so that you get the best exchange rates possible and pay the minimum amount of fees. UPFX conduct in-depth market analysis, use state of the art technology and can offer access to the best exchange rates available. Get in touch with them today to find out how much you can save on your currency transfers.

On Monday, Tony Lloyd, the shadow Northern Ireland secretary, said that Boris Johnson was pursuing a Brexit that was either “disastrous” or a “fantasyland wishlist.”

Lloyd was responding to a letter that the prime minister had written to the EU about reopening the Irish backstop issue and suggesting its replacement by some form of commitment that would guarantee the prevention of a hard border between the UK and Ireland. Johnson’s new position contradicts his previous support of Theresa May’s deal. As Tony Lloyd said: “Boris Johnson seems to have forgotten that he voted for Theresa May’s deal including the backstop. Whichever Brexit outcome he pursues, whether it’s a disastrous no-deal or this fantasyland wishlist, Boris Johnson clearly has no qualms about putting jobs, rights, prosperity or peace in Northern Ireland at risk.”

While Johnson believed that the EU will be receptive to his proposal, on Tuesday Donald Tusk rejected his request. As a response, a Downing Street spokesman said: “that unless the withdrawal agreement is reopened and the backstop abolished there is no prospect of a deal. It has already been rejected three times by MPs and is simply unviable as a solution, as the PM’s letter makes clear.”

Johnson has stated on more than one occasions that he is willing to crash out of the EU without a deal on 31 October, despite warnings that the UK will face food and medicine shortages.

The letter

Johnson’s letter is an attempt at negotiating with the EU which appears as a regressive move, bringing up again the controversy around a hard border with Ireland that the EU and many in the UK and Ireland are clearly against. Before meeting European leaders, Johnson addressed the four-page letter to the President of the European Commission Donald Tusk saying that the backstop is “anti-democratic and inconsistent with the sovereignty of the UK.” He added that there could be different customs arrangements at the Irish border within the two-year transitional period after Brexit. However, having some general commitments in place that would prevent a hard border until the proposed system was agreed, was also a solution, Johnson noted.

But the EU does not wish to renegotiate the withdrawal agreement and the backstop. According to Guardian sources: “There was a two and a half year negotiating process in which the EU compromised, including on the question of the backstop. The withdrawal agreement is not open for renegotiation and the backstop is not open for change. A legally operable backstop to avoid a hard border remains central to the withdrawal agreement for the EU27.”

Johnson said: “I propose that the backstop should be replaced with a commitment to put in place such arrangements as far as possible before the end of the transition period, as part of the future relationship. I also recognise that there will need to be a degree of confidence about what would happen if these arrangements were not all fully in place at the end of that period. We are ready to look constructively and flexibly at what commitments might help, consistent of course with the principles set out in this letter.”

In the letter, he claims that the backstop is anti-democratic because it could force “the UK potentially indefinitely into an international treaty which will bind us into a customs union and which applies large areas of single market legislation in Northern Ireland”.

But an EU source described the letter as “a total moving of the goalposts on an issue of great importance and sensitivity that affects the lives of people on the island of Ireland.”

What happens next?

Johnson has also been accused by Tory MPs who have written a letter saying that the prime minister is preparing for a no-deal Brexit as his demand for the abolition of the backstop is simply impossible.

According to No 10, the prime minister has been clear: “there cannot be any actual negotiations unless the backstop goes; that’s the message he has delivered to leaders in his phone conversations and he will do that face to face. We have been clear that what the EU needs to understand is unless the withdrawal agreement can be reopened and the backstop abolished, there isn’t any prospect of a deal.”

Johnson will be meeting Merkel in Germany on Wednesday and on Thursday Macron, but the eyes of EU leaders will be on the UK, Tory MPs and opposition leaders as they attempt to block a no-deal Brexit on 31 October.

Are you importing or exporting?

If you are an importer or exporter who transfers money internationally, you are aware of the unpredictable movements of the pound due to Brexit and ongoing political developments. Universal Partners FX can offer valuable assistance, in-depth knowledge of the markets and tailor hedging strategies to help you make the most of your money. Give them a call today and find how much you can save on your international money transfers.

Buying property abroad in Brexit times can be stressful, especially when Boris Johnson, the new PM, has announced that the government will be setting aside an extra £2.1bn for preparations in the case of a no-deal Brexit.

Nonetheless, many Brits continue to move to France, despite being considered a costly decision and one of the most expensive countries in the region. But, with its lifestyle, amazing food and cheap wine, and the fact that housing can be quite affordable in certain regions, make France one of the most attractive places to call a second home.

Brexit update

The extra no-deal Brexit funds will be used for stockpiling medicines, adding 500 more border officials and paying for a public awareness campaign about disruption. Johnson’s government aims to convince the European Union that the UK can handle a no-deal Brexit, and it will be able to do so, in three months, on 31 October. Johnson has clarified that he prefers to reach a deal with the EU.

Sajid Javid, the new chancellor, will provide a cash boost of £1.1bn with an extra £1bn available if needed, which means that this year’s spending will increase to £6.3bn.

Labour has criticised the spending which is an “appalling waste of tax-payers’ cash, all for the sake of Boris Johnson’s drive towards a totally avoidable no deal.” John McDonnell, the shadow chancellor, said: “This government could have ruled out no deal, and spent these billions on our schools, hospitals, and people. Labour is a party for the whole of the UK, so we’ll do all we can to block a no-deal, crash-out Brexit, and we’ll deliver a transformative economic policy that delivers for the many, not the few.”

Meg Hillier, chair of the Commons public accounts committee said: “Just because Boris Johnson is making it sound like he’s fighting a war, with seven-days-a-week meetings in Whitehall, that is not licence to spend taxpayers’ money like water, throwing good money after bad. It is of course responsible for a government to be prepared for an emergency. But this is an emergency of the government’s own making – boring though it may be that taxpayers’ money could be spent on essential public services. There isn’t much headroom. There is a bit more than there was but not much. And I don’t think his spending pledges add up.”

The business group the CBI warned that neither the UK nor the EU are prepared for a no-deal Brexit on 31 October, as certain “aspects cannot be mitigated.” The Institute for Goverment on Monday said that there was “no such thing as a managed no deal” and that a “clean break” from the EU is just impossible.

In the meantime, conservative MPs are considering how they can stop a no-deal Brexit if Johnson decides to leave without a deal. Many of us are also considering escaping to France, as Brexit chaos appears unresolved and the situation in the UK is becoming more complicated day by day.

France

While data comparison from Eurostat shows that France “is one of the more expensive places in the EU, with most categories being above the EU average,” British expats still consider the place as an ideal destination for certain reasons. While Paris together with Singapore and Hong Kong are “the world’s most expensive cities,” according to The Economist, there are other places and equally attractive options in other parts of France.

Truth be told, cars can also be expensive, while bringing one with you from the UK and registering it after six months can be a complicated and expensive process. According to The Local, white goods, electronics, DIY equipment and building materials for house renovations, were listed among Brits’ most expensive items.

However, the cheap price of wine in France and its unparalleled quality is incredibly alluring. Especially, if you decide to live in the countryside, restaurants offer cheap meals but high quality. According to a British expat quoted in The Local: “All the villages within a 40km radius of me have small restaurants where I can get a superb lunch for €13-14 with ‘buffet à volonte', main course, cheese, dessert, coffee and red wine included. And the quality is way above any café I would find in the UK.” Drinking and eating local, as well as going to the cinema are some of the amazing and cheap things you can do in France.

Most importantly, the affordable properties you can find is an important incentive. According to The Local, “almost all readers named house prices as one of the country's big benefits.” Nigel Day in Charente said: “The price of houses, whether renting or buying (except in big cities and the Mediterranean strip) is still a bargain, although nothing like it was 15 years ago.” With cheaper "annual housing taxes,” Brits still consider France an ideal home.

If you are interested in buying a property in France, get in touch with Universal Partners FX to discuss the most affordable ways to transfer your funds and protect them from currency volatility due to Brexit. UPFX are foreign exchange experts with years of experience in the financial markets and can offer assistance to move your funds safely and fast. Give them a call today and find out how much you can save or your international money transfers.

Sterling has suffered after Boris Johnson’s no-deal Brexit rhetoric caused reaction among economists and cabinet ministers who continue to warn against it.

A free trade agreement after no-deal Brexit

Johnson’s government and figures in his cabinet, such as Dominic Raab, said that the UK would be in an advantageous position to negotiate a good deal after no-deal Brexit. European Union officials rejected Raab’s claim that agreeing on a free-trade deal after a no-deal Brexit would be “much easier.” A senior EU diplomat expressed the EU’s fears that a no-deal Brexit would trigger the destruction of political relationships and a rhetoric of blaming.

He said: “It would mean the complete breakdown of political relations and I don’t think there would be much trust on the EU side with the Tories, or with the prime minister. Eventually we would get around it because we are pragmatic, but this would be really, really bad, because of all the rhetoric around blaming.”

For another diplomat, after a no-deal Brexit, contact between the EU and the UK would break down: “Our phones will not be connected at that time … I don’t think they will be connected to someone who has reneged on their obligations.”

For the European officials, the most important element is to honour the three basic principles of the withdrawal agreement: citizens’ rights, the Irish border and the financial settlement.

Despite Johnson’s claims to the opposite, renegotiating a trade deal would be a lengthy and arduous process, something almost impossible. As Tanja Fajon, the Social Democrat member of the European parliament’s foreign affairs committee, said, renegotiating “a free trade agreement usually takes years and I believe the UK doesn’t have that time after a no-deal Brexit.”

In addition, Johnson’s character, his threatening attitude towards the EU, make him an unlikeable character according to the MEP, allied to the Labour party: “Who would want to do business with [Johnson] if he is serious with his threats not to pay €60bn (£54bn) debts to the EU? Who wants to deal with the country who doesn’t pay its bills?”

EU hoping for soft Brexit Tories to stop no-deal Brexit

 

Speaking on BBC Radio 4’s Today programme, Raab said that it would be easier to deal with the Irish border through a free-trade agreement after the UK is released from the EU’s “demands and unilateral dictates.”

Over the weekend, it was rumoured that Johnson was “turbo-charging” preparations for no deal, while his strategist for a no-deal Brexit, Michael Gove, said the government was preparing for leaving without a deal.

 

But the EU is reluctant to reopen the deal that was agreed with Theresa May, hoping that certain Tories would try and prevent the hardcore Brexiteers from crashing out of the EU without a deal. The EU would seek to defend its own interests, a spokesman of the European commission said, as Johnson’s ministers continue supporting their no-deal Brexit plans.

He said: “The UK preparedness is not for us to deal with. Our no-deal preparedness protects the EU and our interests in the case of a no-deal Brexit. A no-deal scenario is not our preferred outcome.”

Universal Partners FX and hedging strategies against volatility

Whether you are an importer or exporter, or you conduct your business abroad through regular transfers of funds, the recent no-deal Brexit rhetoric has definitely affected your finances as the pound has sunk against the US dollar and the euro.

While the government would ideally want to avoid a no-deal outcome, leaving without a deal is increasingly becoming a very likely prospect, something that is worrying both investors and ministers.

If you want to hedge your funds and avoid currency volatility, get in touch with UPFX and find out how they can hep you navigate around political and financial uncertainty.

Liam Fox’s trade envoy Andrew Percy has resigned after attacking the government’s move to cut import tariffs if the UK crashed out of the EU without a Brexit deal.

Percy felt “patronised” by the international trade secretary and claimed that the government’s policy would threaten the existing trade deal with Canada, which is worth £800m. The resignation aims to underline that a no-deal Brexit will be disastrous for the UK as it questions Fox’s promise to replicate 40 trade agreements and ensure a smooth Brexit.

More resignations

In addition, the resignation is one among many, as a series of resignations by senior ministers were meant to thwart any moves towards a no-deal Brexit. The resignations by Tory MPs will also ruin Boris Johnson’s smooth march into Downing Street this week.

Philip Hammond and David Gauke’s resignations “highlight the perilous political climate for Theresa May’s expected successor.” With Johnson expected “to be announced on Tuesday as the victor over Jeremy Hunt in the vote of Conservative members,” the resignations hold an extra significance. It is not only Hammond and Gauke’s resignations, but there is a possibility of other ministers and junior ministers opposed to no deal, such as the international development secretary, Rory Stewart, resigning soon after.

Gauke  told the Sunday Times: “Given that I’ve been in the cabinet since Theresa May came to power, I think the appropriate thing is for me to resign.” He added: “If the test of loyalty to stay in the cabinet is a commitment to support no deal on 31 October – which, to be fair to him, Boris has consistently said – then that’s not something I’m prepared to sign up to.”

Gordon Brown has also come forward to warn against a no-deal Brexit, saying that future historians would view it as “an act of economic self-harm that runs wholly counter to the national interest.”

No-deal tariffs

Percy’s resignation is then another warning among many about the terrible impact of a no-deal Brexit. For him, a no-deal Brexit and cutting import tariffs were a huge mistake that would cost them existing trade deals. According to The Independent’s sources: “Andrew warned them back in March, as soon as the UK’s no-deal tariffs were published, that it would mean the Canadians would not go for rolling over the Ceta [Comprehensive Economic and Trade Agreement] deal. He could see they were getting 95 per cent of what they wanted if a no-deal happened, that the tariffs were better than what is in Ceta – so why would they rush to sign up to what the UK wanted? He said it was such a cack-handed approach, but he was patronised by a couple of ministers – including Liam Fox – and told that everything was going to be fine.”

In March, the UK announced that tariffs would be slashed “temporarily” on 87 percent of imports, after a no-deal Brexit. For this reason, Canada felt that there was no reason to carry over the Ceta, one of the most important of the 40 deals, despite pressure from the UK government.

Barry Gardiner, attacked Liam Fox for his lack of understanding of how international trade works and said that “Andrew Percy’s resignation, claiming he was patronised and ignored when he was clearly ‘telling it like it is’, is sadly typical of the arrogance Liam Fox displays to everyone who disagrees with him.”

Don’t let your finances be affected by Brexit

Boris Johnson might be closer to becoming a PM, but Brexit continues to be thorny issue, while the idea of a no-deal Brexit is becoming less appealing for more Tory ministers. Whether Johnson will get the UK out of the EU with or without a deal, or whether Fox really understands international trade, remain to be seen. But what is certain is your ability to make wiser choices and protect your business and finances from political and financial instability. A foreign exchange broker is the best choice for an importer or exporter who transfers money internationally and Universal Partners FX can offer valuable assistance when moving large funds abroad or making regular payments. Give them a call today and find how much you can save on your currency exchange.

Businesspeople chatting in a boardroom

A no-deal Brexit will affect the UK economy, despite Boris Johnson claiming otherwise. Johnson, who is the main candidate to become Britain’s next prime minister, has more than once argued that a no-deal Brexit is possible on 31 Oct., or, as he promised more recently, “do or die.”

Speaking to TalkRadio, Johnson said that Theresa May’s withdrawal agreement needed more than a few tweaks, and that “It’s got to be, you know, we need a new withdrawal agreement if we’re going to go out on the basis of a withdrawal agreement.” While, on certain occasions, he gave the impression to some MPs that he was unsure about leaving the EU on 31 October, with certain MPs he was quite definite about the departure date. When he was asked during the specific interview he persisted: “We are getting ready to come out on 31 October. Come what may,” and added, “Do or die. Come what may.”

But Johnson’s stance is considered rather dangerous as many economists and politicians have argued. Let’s see in more detail, how leaving the EU without a deal will affect the UK economy.

 

What economic impact would a no-deal Brexit have on the UK?

Bank of England governor Mark Carney has rejected Boris Johnson’s claim, as he confirmed that the “UK would be automatically hit by tariffs on exports to the EU.” Earlier this week, Johnson had said that tariffs would not be paid if the UK left the EU without a deal, due to article 24 of the General Agreement on Tariffs and Trade (GATT) which covers the international trade in goods. Clearing the confusion, Carney said to BBC: “Gatt 24 applies if you have an agreement, not if you’ve decided not to have an agreement or have been unable to come to an agreement. Not having an agreement with the EU means that there are tariffs automatically because the Europeans have to apply the same rules to us as they apply to everyone else. If they were to decide not to put in place tariffs they also have to lower their tariffs with the United States, with the rest of the world. And the same would hold for us.”

A no-deal Brexit means that British exports would be hit with import tariffs which are currently around 2-3 percent for non-agricultural goods but are higher for cars and farm products. So, claims by Boris Johnson and other Brexiters saying that Britain could avoid these tariffs under world trade rules, have not only been rejected by the BoE’s Carney, but also trade minister Liam Fox, who also argued that an agreement with the EU would need to be in place.

In the possibility of a no-deal Brexit, Britain will eliminate import tariffs for many products for up to a year, something that would “reduce the inflationary hit to consumers but would expose many British companies to tougher competition.”

In a Reuters article, outlining the effects of a no-deal Brexit, it was pointed out that, based on Bank of England’s estimates, the UK economy could be shocked into a “5 percent contraction within a year, nearly as much as during the global financial crisis.” The same article also noted, that “Britain’s finance ministry says the economy could be 8 percent smaller by 2035 after a no-deal Brexit than if it stayed in the EU. The hit would be bigger if migration slowed sharply.” A no-deal Brexit would deter foreign investors, while Britain’s current account deficit would make Britain depend on, what Carney has called, “the kindness of strangers.”

Finance minister Philip Hammond has warned that a no-deal Brexit would postpone the government’s plans to end austerity, while Brexiters have argued that leaving the EU with no deal would help the public finances as the UK will stop payments into the EU budget.

 

Are you worried by a weak pound?

A no-deal Brexit would probably push the pound down, which will consequently drive inflation down.

If you are a business importing or exporting goods and services to and from the EU, you are possibly worried about an abrupt hard Brexit without a transition deal. Universal Partners FX have all the right international payments and FX hedging solutions for your business, so that you access the international market without any worries. Take advantage of their expertise in foreign exchange and get in touch with Universal Partners FX today.