LONDON (Reuters) – Britain is due to leave the European Union in 10 weeks’ time but it still has no clear way out of the bloc, raising the prospect of no transition period to smooth the shock for the world’s fifth-biggest economy.
Prime Minister Theresa May suffered a major defeat on Tuesday when a huge majority of lawmakers — many of them from her own Conservative Party — rejected her Brexit plan.
Outline - Impact - Brexit - Economy
Following is an outline of the potential impact of a no-deal Brexit on the economy:
The Bank of England has warned that a worst-case Brexit — involving border delays and markets losing confidence in Britain — could shock the economy into an 8 percent contraction within a year, worse than the impact of the global financial crisis.
Output - Brexit - Percent
Output in a less severe but still disruptive no-deal Brexit would fall by around 3 percent.
The BoE also sees a risk in Britain’s large current account deficit. Much of it is plugged by foreign money pouring into speculative assets, something that could dry up in the event of a big Brexit shock to the economy.
Barriers - Term - Companies - Sides - English
Barriers to trade would be raised, at least in the short term, hurting companies on both sides of the English Channel.
British exporters would face EU import tariffs which average 5 percent but are higher for some major exports such as cars which would pay a 10 percent tariff. Britain’s automotive industry employs over 800,000 people.
Manufacturers - Board - Border - Delays - Production
Manufacturers across the board are worried about border delays which would hurt their just-in-time production.
Brexit supporters say those fears are overblown because technology would ease any border delays and exports would flow freely once Britain gets a future EU free trade deal.
Deals - Nations - United - States - India
Deals with faster-growing nations such as the United States, India and China would be a big boost for Britain, the Brexit supporters say. But the country’s...
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