The very possible scenario that the U.K. Leaves the European Union without a negotiated exit deal would be a shock to everyone’s system. With no trade deals in place, tariffs would jolt into effect, causing shortages on shelves and blockages in ports.
So, how are businesses preparing for the possibility of no deal?
Many financial services firms are moving assets out of the U.K. And into the EU. As the consultancy giant EY reported, 20 companies have already publicly announced such shifts. EY put a “conservative estimate” of 800 billion pounds ($1.02 trillion) on the total.
Barclays has shifted ownership of its French, German, and Spanish operations from its British base to its Irish subsidiary. More than a third of big U.K. Financial services firms are moving staff abroad.
Many industries are stockpiling. Though the British government has announced that medicine imports will get priority at the ports in the event of no deal, pharma giants such as AstraZeneca and Merck are caching meds, just to make sure. (AstraZeneca has also begun parallel testing at a Swedish site, owing to likely sudden changes in regulation.)
And in the auto industry, Aston Martin and Volkswagen-owned Bentley are not only stockpiling components in order to avoid manufacturing disruptions, they’re also arranging to use ports other than Dover, the U.K.’s main ferry link with the European mainland, which is likely to become heavily congested.
“We have to prepare for the worst-case scenario,” Aston Martin CEO Andy Palmer told Reuters.
This article originally appeared in the February 2019 issue of Coins2Day.
