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 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.

Buying property in France or Spain has recently been complicated due to Brexit. For many Brits already living there, there are still many questions, a lot of them related to health and access to medicine. The possibility of a no-deal Brexit overcomplicates things too. Let’s see what a no-deal Brexit involves and what it means in terms of health for the many Brits who already live or want to move there.

What is a no-deal Brexit?

No deal means that the UK would leave the European Union (EU) without any agreement about the status of their future relationship. In a matter of fact, it would immediately be left out of the single market and customs union, and consequently lose its privileges of trading between EU members without complex checks and tariffs (on imports). But this will also have a massive impact on other facets of our lives steeped in European institutions and regulations. We will leave the European Court of Justice and Europol, its law enforcement body, and lose our membership of many other EU bodies including the European Medicines Agency (EMA) responsible for the evaluation and supervision of medicinal products. 

While Theresa May has strived to pass her Brexit deal through Parliament, a deal which would at least ensure that the UK would be guaranteed a 21-month transition period to organise the situation and have time to negotiate a trade deal, this is now not the case. On the contrary, with PM’s Boris Johnson’s declarations of leaving the EU with or without a deal, the possibility of a no-deal Brexit is back on the table.

No-deal Brexit

Leaving without a deal means that the 1.3 million Brits living in the EU are suddenly left in a very complicated situation. By crashing out of the EU, means leaving behind the institutions that have for all these years protected us and given us security, health insurance and various other agreements that benefited us and guaranteed our smooth stay abroad.

If you are going on holiday, the government has advised that you buy travel insurance before you leave. However, if you are living abroad, Spain has already agreed to guarantee continued healthcare access to tourists and British expats until the end of 2020, provided that the UK grants Spanish living in the UK the same rights.

In France, things are more complicated, especially for those that spend six months of the year there. Both British and French governments have advised British expats to apply for a Carte de Séjour residency permit, however, many prefectures have halted applications until Brexit becomes clearer.

According to The Local,  both governments are willing to come to an agreement on healthcare as many French people live and work in London, and many Brits live and work in France. Unfortunately, no bilateral talks can officially begin unless Brexit has happened.

For many Brits, the idea of facing medicine shortages and feeling totally helpless is a nightmare. Many have said that, diabetics are stockpiling supplies of insulin by giving themselves less on a daily basis” to avoid dealing with shortages in the possibility of a no-deal Brexit. As Euractiv reported, “many of Britain’s 3.7 million diabetics, who include Prime Minister Theresa May, depend almost entirely on insulin imports from continental Europe.The hormone, which is usually produced by the pancreas, helps diabetics regulate their blood-sugar levels. A no-deal Brexit would almost certainly mean re-establishing customs and health controls, which could lead to delays at the border.”

But as the UK, Spanish and French governments are willing to alleviate any problems and help European residents and expats get the healthcare they need, they will hopefully be no problems in the case of Brexit.

As you are deciding to buy property abroad and worry about currency volatility and political events such as Brexit that cause unpredictable market movements, it is a good idea to get in touch with a foreign exchange expert and discuss your money transfer needs. Universal Partners FX have years of experience in the foreign exchange industry and can offer assistance when making regular payments abroad and sending large amounts of money internationally.

Many businesses that export only to the EU do not have the necessary papers to continue trading after a no-deal Brexit, reports have shown.

According to the Liberal Democrats, statistics showed that no deal would be a “wholly irresponsible political choice,” but the government said that despite only a small number acquired the necessary documentation, these were nonetheless “the firms responsible for the bulk of exports to the EU.”

Once the UK crashes out of the EU, UK firms would require an Economic Operator Registration and Identification (EORI) number to be able to comply with economic operators and customs authorities.

 What is an EORI number?

EORI stands for “Economic Operators Registration and Identification number” and can be used by both business and individuals when trading. The EORI number acts as an identification number in all customs procedures making processes efficient, not only for customs authorities, but also for statistical and security purposes.

The EORI number is made up of two parts. One includes the country code of the issuing Member State and the other a code or number that is unique in the Member State.

According to the European commission, a legal entity such as a company or a natural person can request an EORI. More particularly, “persons established in the customs territory of the Union should request the assignment of the EORI number to the customs authorities of the EU country in which they are established.” Also, “persons not established in the customs territory of the Community should request the assignment of the EORI number to the customs authorities of the EU country responsible for the place where they first lodge a declaration or apply for a decision.”

Exports and imports 

If you are a firm that exports and imports outside the EU, you will have an EORI number, but as The Guardian notes, “registration has become a pressing issue for the 245,000 who trade internationally only within the EU. A no-deal Brexit would be particularly difficult for them because, instead of having current rules apply during a transition, they could find their trading opportunities shut down after 31 October without an EORI number.”

In another article by the Business Insider titled “Just 3 in 10 British firms that export to the EU are prepared for a no-deal Brexit,” it is said that only a 27% of British businesses have secured an EORI number and that there is a growing concern that British businesses will not be prepared for a no-deal exit on 31 October.

Lib Dem MP Chuka Umunna obtained information from the Treasury that shows that many firms are simply unprepared for a no-deal Brexit. The figures also show that if exporters apply for an EORI number at the current rate, all businesses won’t be registered until maybe the start of 2021. Umunna said that the statistics show “an overwhelming majority of UK exporters to the EU are unprepared for a ‘no deal’ Brexit and will not be in a position to deal with the mountain of red tape and bureaucracy it will burden them with on 31 October.”

He added: “Pursuing a ‘no deal’ Brexit is a wholly irresponsible political choice of the new administration for which there is no mandate and which will put businesses and jobs at risk. Any form of Brexit will harm the economy and put obstacles in front of UK firms which is why Liberal Democrats not only want a final say for the people on any deal but are also the only party that can get into Government which is committed to stopping Brexit altogether.”

British small businesses are not prepared for a no-deal Brexit in October, and, as the Business Insider pointed out, are even less prepared than they were back in March. On the other hand, businesses that already spent millions of pounds for a no-deal Brexit in the spring are now less motivated to spend more money in case there are further delays, while others just simply cannot afford it.

Chancellor Sajid Javid’s announcement last week for additional no-deal Brexit funding is not especially encouraging as most of it will be used towards government competencies, and not really towards helping businesses prepare. 

A spokesperson for the HMRC – the department responsible for issuing EORI numbers – said it was doing “everything we can to help businesses get ready for the UK leaving the EU. Businesses who import or export goods need to take action, the first step of which is obtaining an EORI number (if they don’t already have one.) It’s simple and free and can be done online.”

If you are an exporter or importer and you worry about Brexit volatility, getting in touch with your currency exchange specialist will give you some peace of mind. Universal Partners FX are experts in the foreign exchange markets and can assist you when transferring large amounts of money or making regular international transfers. Get in touch with them today to find out 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.