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Brexit: No10 tells firms to get ready for life outside single market as BofE says ramp up ‘no deal’ planning

The latest round of negotiations with Brussels is taking place this week (PA)

3 min read

Number 10 has warned businesses they must continue to prepare for life outside the single market and customs union from 1 January.

The comments from Downing Street came amid reports that Bank of England Governor Andrew Bailey has urged firms to ramp up their preparation for a “no deal” Brexit when the transition period finishes at the end of 2020.

The latest round of negotiations with Brussels is taking place this week, but there has been little movement on a free-trade agreement between the UK and the EU.

Downing Street has repeatedly ruled out extending the transition period, making it more likely that no agreement will be made before the 31 December deadline.

The Prime Minister’s official spokesperson said: "We will continue to approach negotiations constructively and work hard to reach an agreement.

"But whatever the outcome of negotiations, we will be leaving the single market and customs union at the end of the year.

"Businesses therefore need to prepare for life after December 31, and many have done so already.

"We will continue to engage closely with businesses to ensure they are well prepared for the end of the transition period and ready to make the most of the opportunities which will come with our economic independence."

Car manufacturer Nissan has again warned its huge Sunderland factory would not be able to continue in its current form if there is a no-deal Brexit.

Ashwani Gupta, the company’s global chief operating head, told the BBC: “You know we are the number one carmaker in the UK and we want to continue. We are committed. 

“Having said that, if we are not getting the current tariffs, it’s not our intention but the business will not be sustainable. That’s what everybody has to understand.”

The PM’s spokesperson said in response: “We will continue to work hard to reach an agreement, for as long as there is a constructive process ongoing.

“Our aim is zero tariffs and zero quotas – that is at least as much in the EU’s interest as ours and the EU has come close to reaching this aim in their other FTAs.”

But Sky News reported that Mr Bailey told Britain's biggest lenders to intensify preparations for a no-deal in a call with bank chief executives on Tuesday.

The broadcaster said Mr Bailey's remarks led those on the conversation to infer there had been a shift in assumptions about the outcome of the ongoing talks, which have been hampered by an impasse over fishing rights and the EU's call for a "level playing field" on standards and rights.

A statement from the Bank said it is looking at "a number of outcomes" including a no-deal Brexit.

"It is fundamental to the Bank of England's remit that it prepares the UK financial system for all risks that it might face,” it said.

"In performing that role, the Governor meets the leadership of UK banks on a very regular basis.

"As we have said previously, the possibility that negotiations between the UK and EU over a future trading relationship might not conclude in a deal is one of a number of outcomes that UK banks need to prepare for over the coming months."

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