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Northern Powerhouse

Brexit weekly digest 28 October

The EU have announced this morning that they will grant a ‘flextension’, giving the UK until 31st January to resolve the ratification of the Withdrawal Agreement.  Negotiations are now starting on a proposed General Election date but

The prospect of another Brexit extension will irk some UK companies, as they stare at massive stockpiles of raw materials, parts and finished goodsBosses now have to decide whether to whittle these supplies down, or maintain them in case Britain crashes out of the EU on 31 January (the new deadline agreed by EU leaders today).   Amanda Tickel, global Brexit lead at Deloitte, says businesses will have “mixed feelings” about Donald Tusk’s announcement today.  “While there is relief that the disruption of a no-deal exit on 31 October is off the table, further delay prolongs uncertainty. Businesses will be wondering what to do with partially implemented restructuring, stockpiles and logistics plans. With the added stepping stone of a possible election in the coming weeks, planning for the future could be even harder.”

Documents, revealed by the Financial Times, say that the drafting of commitments on workers' rights and the environment in the Brexit deal "leaves room for interpretation".  Labour has said leaked government papers "confirm its worst fears" about plans to dilute workers' rights after Brexit.   Labour said it is a "blueprint" for ending "vital rights and protections".

The impact of Brexit uncertainty has cost the Scottish economy around £3 billion – relative to where it would have been – according to new research from the Fraser of Allander Institute (October 23).  In its latest Economic Commentary, supported by Deloitte, the University of Strathclyde-based research institute highlights how growth has remained sluggish over the past year with firms putting off investment as they await the outcome of the negotiations over the UK’s exit from the EU.

Under no deal, Bloomberg Economics predicts the UK economy would see cumulative growth of 5% between 2019 and 2023, which rises to 7.5% if the UK votes for a renegotiated deal -- along the lines of a customs union -- in a second referendum next year. A vote to remain then would see the economy expand by 9% more over the period, with the difference between that scenario and no-deal at 85 billion pounds.

The CBI said Brexit uncertainty, shrinking order books and a slump in global trade were blamed for the worst outlook in 10 years for the manufacturing sector with the car industry and transport equipment sectors cutting back at the fastest rate.  A wave of corporate insolvencies, company profit warnings and a gloomy forecast of manufacturing investment over the next year has sparked concerns that Brexit uncertainty will weigh on the UK economy more than previously estimated.

An internal UK government memo on the consequences of Boris Johnson's Brexit deal renegotiation singles out the removal of the word "adequate" from the UK-EU Political Declaration to describe mechanisms for enforcing common social, environmental, and labour standards after Brexit.

Minister Boris Johnson's Brexit deal is "acceptable" and the country should push ahead with it, leading banker has said.  Sir Ian, chairman of Barclays' UK operations, told the BBC that business leaders wanted to see certainty.  He added that it was "extremely unlikely" further negotiations with the EU would produce a different outcome. 

More than half of French small and mid-sized companies that do business with Britain have not assessed the impact of Brexit, according to a French finance ministry survey, weekly newspaper Journal du Dimanche (JDD) reported.  

Data from insolvency experts Begbies Traynor reveals 6,872 businesses in the region were experiencing significant financial distress at the end of Q3 2019.  There has been a surge in the number of firms in ‘significant’ financial distress since the EU referendum in June 2016, new figures reveal.  Data from the Liverpool office of insolvency experts Begbies Traynor reveals 6,872 businesses in the region were experiencing significant financial distress at the end of Q3 2019, a 35% increase from the end of Q3 2016 where the figure was just 5,066.  





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