The Financial Conduct Authority (FCA), Britain’s financial regulatory body, has told banks to start making preparations and contingency plans for a hard Brexit, City A.M. reported on Friday.
This morning, Nausicaa Delfas, head of international strategy at the FCA, said it is important to “continue to plan for a range of scenarios,” including the UK exiting the trading bloc without a deal in place.
"Across the FCA, together with colleagues from the Bank of England (BoE) and the government, we have been working to develop a number of safeguards and contingencies, in the event of a hard Brexit, to ensure that 'day one' works smoothly," Nausicaa Delfas told banks and business leaders at a CityUK event on July 20.
With Brexit just eight months away, newly appointed Brexit Secretary Dominic Raab told parliament his ministry will soon be publishing guidance on a hard Brexit in a bid to tackle some of the uncertainty surrounding the prospect of a no-deal scenario.
In the event of a no-deal Brexit, WTO trading rules would come into effect, rendering the UK subject to tariffs on EU imports and exports, resulting in price inflation, at least in the short run, and making British exports less competitive relative to alternatives in the union.