BoE confirms cost of Brexit greater than Covid

The lid is being lifted and we're now seeing what Brexit is likely to cost us all !!!


No-deal Brexit economic damage will be worse than Covid pandemic, Bank of England governor warns
Andrew Bailey says trade deal very much in UK’s interests

Jon Stone
Policy Correspondent
@joncstone
5 hours ago
17 commentsThe long-term economic effects of a no-deal Brexit will be more damaging than those of the coronavirus pandemic, the governor of the Bank of England has said.

Andrew Bailey said disruption to international trade caused by the failure to reach an agreement would not be in the interests of the UK and that it would take a long time for the British economy to adjust the new trading conditions.

The governor's analysis contrasts with that of Boris Johnson, who has claimed against evidence that Britain would "prospect mightily" under a no-deal.

Chancellor Rishi Sunak also said this weekend that the UK would “prosper in any eventuality”. Negotiators are running up against the deadline to secure a deal this month, with sticking points on fishing and state aid rules.

“The long-term effects, I think, would be larger than the long-term effects of Covid," Mr Bailey told the Commons Treasury select committee on Monday.
He added: "It would be better to have a trade deal, yes, no question about it.”

The governor's prediction comes after an analysis by the London School of Economics and the think-tank UK in a Changing Europe released in September warned that the economic impact of a no-deal would the two to three times worse than the pandemic.

The study found that failure to reach an agreement would see a reduction in GDP worth 8 per cent over a decade compared with remaining in the EU.

While the Covid-19 pandemic has seen Britain weather a 20 per cent fall in GDP in a single quarter, much of the damage is expected to rebound when restrictions are able to be lifted.

Despite the looming deadline, negotiations are currently taking place by video call only after one of the EU’s negotiating team tested positive for coronavirus, necessitating a period of self-isolation.


Boris Johnson and the European Commission president, Ursula von der Leyen, are expected to speak on the telephone before the weekend, as adherence to a supposed mid-November deadline for striking an accord looks increasingly far-fetched.

Britain technically left the EU early in 2020 but will remain in a transition period until 11pm on 31 December 2020, when it will leave the single market and customs union, and stop following EU rules. The UK and EU are currently negotiating a trade agreement to govern their future relations.

 

Brexit news – live: Boris Johnson warned six months of port ‘mayhem’ ahead in 2021, even if trade deal agreed
All the latest developments in UK politics

Kate Ng,Adam Forrest@adamtomforrest,Samuel Osborne@SamuelOsborne93
9 minutes ago
63 comments

Boris Johnson’s government has been warned of “mayhem” at Holyhead port when the Brexit transition period ends, even if a UK-EU trade deal is struck. The Irish Road Haulage Association said the first six months of 2021 would be “terrible” due to the lack of preparations.

It comes as Bank of England governor Andrew Bailey has said that a no-deal Brexit would cause even more long-term damage to the UK’s economy than the coronavirus pandemic. The influential figure told MPs a deal was in the “best interests of both sides”.

It follows an optimistic assessment of trade talks by Irish premier Micheál Martin, who revealed legal texts were now in play on all areas of the prospective trade deal. “I would be hopeful that by the end of this week we could see the outline of a deal,” said Mr Martin.

• Bank of England governor sounds no-deal Brexit warning
• Plans for Brexit hauliers’ roadside toilets ‘still unknown’
• How Boris Johnson’s hypocrisy could come back to bite him

Councils to be given powers to close businesses which fail to make premises Covid-seure
Councils will be given new powers to close businesses for up to a week if they fail to make their premises Covid-secure, Downing Street has said.

The prime minister's official spokesman told a Westminster briefing: "Until now, local authorities have been able to issue fines to businesses who have failed to comply with the legal obligations to be Covid-secure.

"The new powers will allow them to formally request rapid improvement or close these premises where appropriate through the issuing of notices.

"These will include a coronavirus improvement notice which will give premises 48 hours to rapidly implement Covid-secure measures; a coronavirus immediate restriction notice which will close any premises which pose a public health risk for an initial 48 hours to give the premises time to put in necessary safeguards; and a coronavirus restriction notice which will close premises for seven days."

The spokesman said premises will be fined £2,000 for breaching an improvement notice and £4,000 for breaching a restriction notice.

‘It’s already five past midnight – we need a text,’ says top MEP
Senior MEPs have suggested they could still veto a Brexit trade deal if it doesn’t offer a “sufficiently balanced” compromise.

The influential MEP Christophe Hansen, who sits on the trade committee, said: “If there is a deal, I believe it will be sufficiently balanced that the European Parliament can give its consent. Otherwise, there will be no deal. Michel Barnier knows very well what we expect from him.”

Bernd Lange, the parliament’s trade chief, said: “It’s already five past midnight. We need a text, otherwise ratification and democratic scrutiny by the European Parliament will be a farce.”

A reminder there’s still a long way to go, even if Michel Barnier and David Frost forge an agreement in the coming days. A free trade deal would still need to be approved by national leaders from the EU27, MEPs in the European Parliament – and national parliaments across the bloc.


Six months of Brexit ‘mayhem’ ahead in 2021, say haulage chiefs
Haulage chiefs have claimed there will be “mayhem” at Holyhead port when the Brexit transition period ends, regardless of whether there’s a trade deal or not.

The Irish Road Haulage Association (IRHA) said the first six months of 2021 would be “terrible” because the port hasn’t been properly prepared for the changes. Holyhead is the UK’s second largest “roll-on roll-off” port after Dover, and carries around 1,200 lorries and trailers a day from north Wales to Ireland.

“After the deadline and UK Brexiting, the decisions still won’t be made,” said the IRHA’s Eugene Drennan. “They’ll unfold as the problems appear. That leads to a certain degree of mayhem … you’ll have a lot of anxious moments.”

He added: “Even though it’s called the transition period, there has been no transition.”

Michael Gove, the minister in charge of planning, said last month that the UK was “increasingly well-prepared” for the end of the transition period.“We’re beginning a new relationship with the EU. And as we do so, we are determined that the UK will remain a global leader for asset management,” he told a conference organised by The Investment Association.

 

No-deal Brexit would wipe 2% off coronavirus-hit UK economy in 2021 – OBR

PA
Nov 25th 2020 10:30AM

A no-deal Brexit is forecast to wipe 2% off the economy next year and lead to a long-term decline in gross domestic product (GDP), according to the latest analysis.

Trade talks between the UK and the European Union continue to be deadlocked as the December 31 cut-off date looms closer.

If there is no agreement by the end of the year then the UK is set to revert to World Trade Organisation terms with its largest trading partner, a move the Office for Budget Responsibility (OBR) has forecast could “reduce real GDP by a further 2% in 2021”, on top of the havoc wreaked by coronavirus.

4%
The forecast long-term drop in productivity even if the UK and EU sign a free trade deal
OBR
The economic shock of the “various temporary disruptions to cross-border trade and the knock-on impacts” would continue for years to come, it predicted.

In its analysis, published to coincide with Wednesday’s Spending Review, the OBR said: “As these abate, the longer-term effects of lower trade intensity continue to build such that output is 1.5% lower than our central forecast after five years, and 2% lower in the long run.”

Employment would also suffer in the event of a no-deal outcome, it predicted.

The OBR forecasts that unemployment will peak at 8.3% in the third quarter of 2021 if there is no agreement – 0.9% higher than in its central forecast for the quarter.

Even with a free trade agreement in place with Brussels, the OBR has held to its previous forecast that Brexit would “lower both export and import intensity over time”, and that productivity would drop by 4% in the long term compared with if the UK had remained a member of the EU.

In an update to MEPs, European Commission president Ursula von der Leyen said there was still no clarity on whether a deal would be signed.


European Commission president Ursula von der Leyen gave an update on Brexit to MEPs (Olivier Hoslet, Pool via AP)
“I cannot tell you today if in the end there will be a deal,” she said.

The OBR said it was not satisfied that businesses or Government was ready for the changes Brexit would bring even if the current negotiations prove fruitful.

“We continue to assume that the UK and EU conclude a free trade agreement and that there is a smooth transition to the new trading relationship after the transition period ends on December 31 2020,” it said.

“However, there is evidence that neither the Government nor businesses are fully prepared for the imminent changes even if a deal is agreed.

“For example, the Bank of England’s decision maker panel survey for October reports that over a third of firms are either only partially prepared or not prepared at all.

“If an agreement is successfully concluded, we assume that officials on both sides of the border will display a degree of discretion in order to minimise disruption to trade.”

 

Despite 'experts' opinion to the contrary, that stupid bastard Boris still insists the uk will thrive without an EU trade deal. !!!


Johnson thinks UK will ‘thrive’ without EU deal despite warnings of economic hit

PA
Nov 26th 2020 10:22AM
Boris Johnson believes the UK will "thrive" without a European Union trade deal despite official forecasts warning of a major economic hit.

Downing Street insisted that the Government remained committed to securing a post-Brexit trade deal and talks were continuing virtually with Michel Barnier's EU team.

But there is no certainty on when face-to-face talks will resume amid reports Mr Barnier will not travel to London without a major shift in the UK's position.

The EU's chief negotiator is awaiting the result of a Covid-19 test before he would be able to travel, but reports from Brussels suggest he will not head to London for talks this weekend if they are to be pointless.
Face-to-face talks in Brussels were suspended a week ago after a member of his team contracted coronavirus.

The Prime Minister's official spokesman said: "Negotiations will continue virtually. It's a matter for them when and if they choose to travel."

The spokesman said the UK side was "committed to working hard" to reach a free-trade agreement (FTA) and were working to "bridge the gaps that remain between us".

"Throughout the negotiation our position has been consistently clear," the spokesman added.

We have also tested how a 'no deal' Brexit affects our central forecast and scenarios. If we left without a deal, GDP would be a further 2% lower in 2021 and 1.5% lower in 2025.#SpendingReviewpic.twitter.com/H9whee0SSS

— Office for Budget Responsibility (@OBR_UK) November 25, 2020
The Office for Budget Responsibility laid bare the economic importance of a deal, warning that failure to reach an agreement could result in a 2% hit to gross domestic product, the standard measure of the size and health of a nation's economy.

The Prime Minister's spokesman said: "The PM believes that the UK will thrive with or without a deal with the EU.

"But it remains our ambition to reach an FTA which is why we continue to negotiate."

Both sides have stressed the need to work quickly if a deal is to be in place when transition arrangements expire at the end of the year.

The UK will leave the single market and customs union in any event but work continues on a deal to allow smooth trade with no quotas or tariffs.

But the talks have been stuck for months on the issues of fishing rights, the governance of any deal and the "level playing field" conditions aimed at preventing unfair competition by cutting standards or increasing state subsidies.