Mark Carney, Governor of the Bank of England, holds Financial Stability Report Press Conference.
As the clock counts down towards 11 December and the vote on Theresa May’s draft withdrawal bill, warning signs are growing that the U.K.’s private sector could be left in the lurch should Britain crash out of Europe.
Talk of no-deal planning has until now centered on the public sector, with stories of medicines and food being stockpiled by the government, however Governor of the Bank of England Mark Carney this morning gave a dire warning that “less than half” of the U.K.’s businesses in the private sector have contingencies in place for no-deal.
“All the industries, all the infrastructure of the country, are they all ready at this point in time? And as best as we can tell, the answer is no,” he said on the BBC’s Today Programme.
It’s unclear whether the lack of no-deal planning in the private sector is due to businesses being overconfident in Prime Minister May delivering on her withdrawal deal or because they are underestimating the impact of a no-deal Brexit.
Theresa May Visits Northern Ireland And Wales In A Bid To Save Her Brexit Deal.
Both assumptions could soon be tested.
Yesterday the Office of National Statistics warned that the U.K. risked a 9.3% hit to its growth over the next 15 years should it crash out of Europe with no deal, versus a 2.5% hit under May’s draft withdrawal bill.
Earlier this week the Bank of England declared that a no-deal Brexit would trigger a 1970s-style recession and send the pound crashing.
Today the U.K.’s financial watchdog, the Financial Conduct Authority, also wrote to Parliament with its impact assessment of no-deal Brexit versus Theresa May’s withdrawal deal. Chief executive Andrew Bailey unsurprisingly concluded that “we strongly support an implementation period” but said the FCA believes it has plans in place to mitigate the worst of the damage should Britain crash out.
When it comes to May’s ability to muster enough political will to get her withdrawal bill through Parliament in less than two weeks, the signs look equally doubtful.
May is currently embarking on a nationwide tour to sell her deal to the people, while it appears the real sale needs to happen in Westminster where calculations suggest she is significantly lacking in support to get her bill passed.
Meanwhile, in response to the economic warnings of the last few days, leading Brexiteer MP Jacob Rees-Mogg branded Mark Carney a “second-tier Canadian politician” following his comments, and former Brexit secretary David Davis warned that there is “consistent overestimation” of the damage caused by a no-deal Brexit.
With Downing Street’s leaked media strategy indicating a shift towards the topics of security and international trade over the next 24 hours, we might shortly enjoy a little respite from the economic doom and gloom.
Time enough for some businesses to do a little worst-case-scenario planning, maybe.
