A leaked cabinet letter has revealed that another recession could hit the UK in the event of a no-deal Brexit.
This news has come just as the EU’s chief Brexit negotiator Michel Barnier announced that a no-deal Brexit “becomes day after day more likely”.
The letter from cabinet secretary Sir Mark Sedwill contained analysis that warned about the damaging effects a no-deal Brexit could have on the economy including:
- A fall in the pound that would create a damaging UK-only recession, likely to be “more harmful” than the 2008 global recession.
- A 10% increase in the price of food.
- The collapse of many businesses that rely on trading with the EU.
- Pressure on the government to find money to bail these businesses out.
As MPs continue to struggle to find a solution to the problem that they agree on, experts warn that a no-deal Brexit could be looming.
Alternative solutions include a customs union, second referendum, or an extension to Article 50.
Whatever the outcome, it’s going to be a while before we hear the end of Brexit and its effects on our economy.
Businesses should proactively prepare for Brexit
In the meantime, businesses should brace themselves for a period of uncertainty and instability. Proactively preparing your business for a no-deal Brexit can help you to adapt to changes quicker and minimise financial loss.
If your business has already taken a downturn or you are struggling with debt, then now is a good time to seek advice from a professional.
Our team of experts can offer debt advice and company rescue servicesincluding help with improving cashflow and negotiating with creditors to turn your business around.
For more information and to discuss your business’ situation in more detail, call our free helpline on 0845 273 4000.