UK and EU Businesses could suffer an extra £58 billion (around US$80.4 billion at the current GBP/USD exchange rate) in costs as a result of a “no deal” Brexit, according to a report jointly published today by multinational law firm Clifford Chance LLP and Oliver Wyman management consultants.
The report warned that the UK’s financial sector would be worst-affected in such a scenario while estimating that companies in EU member states will pay a total of £31 billion (circa US$43 billion) per year in "tariff and non-tariff" barriers.
Meanwhile, UK businesses exporting to the EU will pay £27 billion (around US$37 billion) per year based on current trade levels.
"These increased costs and uncertainty threaten to reduce profitability and pose existential threats to some businesses," the report reads.
The International Monetary Fund (IMF) previously warned that the absence of an EU-UK deal would “push up taxes, slow down growth and destroy jobs” in Britain’s economy.
Via a referendum in mid-2016, the UK voted to leave the EU to have more freedom to trade in the international arena, and regain control of its borders and immigration policy. The issue of Northern Ireland’s border with the EU has emerged as a central stumbling block to negotiations, with a compromise yet to be agreed.