25 January 2019

The Guardian: No-deal Brexit will disrupt UK economy, says Philip Hammond

Philip Hammond has warned of significant disruption to the UK economy if Britain leaves the EU without a deal in March, but has said a no-deal Brexit was “a default that we could find ourselves in”.

Speaking the day after he told nervous business leaders to accept the result of the referendum, the chancellor said the disruption caused by leaving the EU without a deal would “settle down”.

“We will find ways of managing things like the additional time it takes for trucks to get through the border,” he told the BBC’s Today programme.

“But it might take us quite a while to sort that out. So there will be a short-term impact through disruption. There will be a long-term impact through a reduction in the size of our economy.”

He added: “I clearly do not believe that making a choice to leave without a deal would be a responsible thing to do, but I recognise that that is potentially a default that we could find ourselves in.”

Addressing a Confederation of British Industry (CBI) lunch in Davos, Switzerland, on Thursday, Hammond said companies had to accept that changes were coming – such as an end to the free movement of people and business models built on a supply of cheap labour.

Speaking to the BBC from Davos on Friday morning, the French finance minister, Bruno Le Maire, said the country was preparing for a no-deal Brexit. “We hope for the best, but we also prepare for the worst,” he said.

“It is also my responsibility as the minister in charge of finance and the economy to prepare for the worst and, of course, a Brexit without any agreement, without a deal, would be a catastrophe for the UK, but would also have negative consequences for all European countries.”

Le Maire was asked about reports that some EU countries were putting pressure on the European commission to be more generous to the UK in the event of no deal and allow UK hauliers the right to operate on the continent. He said: “You can’t be out of the EU and get all the benefits of the single market. That’s a clear red line for France.” [...]

Full article on The Guardian

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