With fewer than 50 days until the UK is set to withdraw from the European Union, the Confederation of British Industry has issued a warning that UK exporters risk being locked out of harbours around the world in the event of a no-deal Brexit. Many exporters will be dispatching goods within the next few days that will not arrive at their destination until after the 29 March deadline; if no deal is in place by then, the goods could either be stuck in ports or be subject to considerable additional costs.
Ben Digby, the International Trade Director at the CBI, said: “In the event of a ‘no-deal’ Brexit, there are ships that are setting sail from the UK today that will have to weather a thick extra fog of uncertainty on the high seas, as they could arrive in port effectively locked out of the very market they have travelled across the world to get to.” It is within the realms of possibility that 20% tariffs could be placed on goods overnight if they do not arrive before the Brexit deadline. That is likely to amount to millions of pounds in additional costs per year.
Theresa May, Jean-Claude Juncker and Donald Tusk met in Brussels yesterday for Brexit talks, and it was rather alarming how quick they were to downplay the prospects of a breakthrough in negotiations. The Prime Minister has recently conceded that there will have to be an Irish backstop – which has angered hard Brexiters in the Tory party – but the precise terms of the backstop are still a sticking point. As it stands, no clear solution presents itself. There has been two years of negotiations and now only a few weeks to get the deal over the line. The EU has agreed to fresh talks though and we should be thankful for mercies at the moment, however small.
The Labour leader, Jeremy Corbyn, has offered an olive branch of sorts, as he said his party will support May’s plans if she makes five binding commitments, including joining a customs union. That response has divided Labour MPs, some of whom are in favour of a second referendum, but were May to agree to the demands, she would certainly have a better chance of getting her deal through Parliament. Labour felt moved to deny that if May rejected Corbyn’s Brexit letter, a second vote would be the next step.
Yesterday’s economic data is included in the sections below, which should make for interesting reading. The Bank of England met and the European Commission revised its growth forecasts again. The world appears to be plagued with uncertainty at present and we really cannot emphasise just how important managing the risk to your budget is. Speak to your Personal Trader on 020 7898 0541 about how to use a forward contract to lock in your rate.