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Northern Powerhouse

Brexit weekly digest 23 October

The Commons saw another defeat for the UK Government last night, with the proposed timetable for the Withdrawal Agreement remaining unsupported.

The fallout from this is still being analysed, but what does remain is a period of continued uncertainty for businesses.  The UK Government advice is still around preparedness for a No Deal exit.

The governor of the Bank of England has told the BBC that the new Brexit deal struck by the government is "welcome" and a "net economic positive".  Mark Carney said the deal "takes away the tail risk of a disorderly Brexit".  However the governor warned that the deal might not boost the economy to the same extent as the deal put forward by Boris Johnson's predecessor, Theresa May.  

Reuters have reported on how businesses are preparing for Brexit.  Leaving the European Union without a deal at the end of this month will force businesses to navigate an unprecedented set of challenges from potential blockages at ports to the introduction of paperwork and tariffs. 

Prolonged political uncertainty in Britain is forcing finance directors to cut costs and hold off hiring to help companies prepare for an unpredictable year ahead, according to a survey by Deloitte.  The audit of 91 chief financial officers of some of Britain's largest companies showed that a renewed focus on cost control will be a strong priority for six in 10 of respondents over the next year, the highest level for 10 years.

The lobby group representing the UK car industry says manufacturers have "wasted" more than £500m in preparations for Brexit.  The Society of Motor Manufacturers and Traders (SMMT) made the declaration following a survey of its members that suggested a third of companies were already cutting jobs in anticipation of a car crash no-deal scenario.  

France has warned companies bringing goods in and out of Britain through its border after Brexit that they are responsible for making sure their paperwork is in order.    French junior economy minister Agnes Pannier-Runacher said on Tuesday the government had done all it could to prepare.  But, she told Reuters, French measures including a “smart” Channel border allowing trucks and others transporters to complete customs checks in advance would only go so far to help businesses if they were not ready. 

Companies are stepping up purchases of insurance to protect themselves against insolvencies in Britain, industry sources say, in part due to concerns about the impact of Brexit. UK insolvencies rose by 12% in the second quarter compared with a year earlier, according to government figures, bringing insolvencies to their highest level in five years.

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