For months, Brexit has been a topic for comedic roasting and political point-scoring in Commons debates, but now it seems the excrement is starting to hit the fan in a major way.
The spectre of a ‘No Deal’ Brexit, i.e. one in which the UK leaves the European Union without any trade agreements or partnerships of any kind, might sound good to hard-line right wing fanatics, but the reality is one that could have wide-ranging economic consequences for the vast majority living in the United Kingdom.
The credit rating agency Moody’s has warned of stark ramifications if the UK leaves the EU without a deal of any kind.
The price of the pound would plunge, according to their report, and that would impact upon UK businesses’ credit rating. With inflation up and unemployment increased accordingly, a recession would be a potential side-effect of the decision.
Worst hit would be the automotive, aviation and chemicals sectors, while trading conditions on the high street could lead to significant job losses.
It’s not complete doom and gloom though – surprising given the evidence so far – with Moody’s chief credit officer Colin Ellis saying: “We still think the UK and the EU will eventually reach an agreement to preserve many – but not all – of their current trading arrangements, particularly around trade in goods.
“However, we believe the prospect of the UK leaving the EU without any agreement has risen materially.”
Theresa May is expected to put Cabinet ministers on high alert today (Thursday) that a No Deal Brexit will be activated in November if no agreement is reached by then.
Passports, Driving Licences & Mobile Phones: Other Brexit Developments
The government will also release a raft of papers on Thursday that highlight other areas of change in a post-Brexit world.
The first will refer to passport ownership, and whether UK citizens will be able to travel freely to and from the EU for business or pleasure.
Early indications suggest that holiday-makers and corporate travellers will not be affected by change as such, although anyone with less than six months left until their renewal date will be required to get a new passport prior to travelling.
There’s not such good news for motorists who tend to drive on holiday or rent a car in an EU member country. Following the completion of Brexit in March 2019, you may need to apply for a new ‘international’ driving licence before taking to the wheel.
Here’s some good news to at least soften the blow: there will still be free data roaming even after the divorce bill is finalised. Two major mobile providers, EE and Vodafone, are on board, with the government forcing others to follow suit through legislation if required.
Credit Card Fees Could Soar
One other aspect of Brexit planning that cannot be overlooked is a likely increase in credit card fees for payments made in the EU by UK citizens.
These won’t be covered by any subsequent ban on surcharges either, so if you plan on splashing out in a European Union country in the coming months it might be worth sourcing an alternative type of finance.
Other parties supremely inconvenienced will include food exporters, who are likely to face delays and extra charges at border control, and pharmaceutical companies, who have already been asked to stockpile medicines by an increasingly-anxious government.
Another rather sinister problem is that the UK police force and criminal investigations team would lose access to the EU-wide database of known crooks, which naturally increases the chances of a rogue or two making their way across the border.
So Will There Be a Brexit Deal?
Dominic Raab, the Brexit secretary, has spoken of an ‘over-riding priority’ to ensure that the UK leaves the European Union with some kind of deal in place.
The concern is that it is becoming increasingly obvious the extent of the problems the UK faces in a No Deal scenario, with the EU in a strong bargaining position.
Raab also stated that a deal was the most likely outcome, but also that ‘…we must be ready to consider the alternative.’
“There would be risks and some short-term disruption. Extra checks at the EU border would bring delays for businesses,” he continued.
“In a no-deal scenario, we can’t control the EU’s response to UK goods going the other way.”