Economist warns of rising likelihood of no-deal Brexit

A no-deal Brexit is becoming “more likely by the day”, a leading economist has told Cumbrian businesses.

Suren Thiru, Head of Economics at the British Chambers of Commerce, advised firms to carry out a “health check” ahead of the UK’s scheduled departure from the EU on October 31.

He was speaking following an event in Carlisle staged by Cumbria Chamber of Commerce and the Bank of England.

The Bank’s regional agent, Mauricio Armellini, shared the platform to present its latest inflation report.

Mr Thiru said: “Even if businesses aren’t directly exposed to trade with the EU, they need to take stock as to where the risks are to their business and to their supply chain.”

He expects the UK to see modest growth next year, in the event of a Brexit deal, but growth will be weaker, or non-existent, if the UK leaves the EU without a deal.

He added: “If we get a no-deal Brexit, the probability of a recession goes up – but it isn’t inevitable.

“It depends on what happens in the global economy and what measures the UK Government takes in response to no deal. The UK is still a great place to do business.”

Mr Thiru anticipates that unemployment will remain low, however Brexit pans out, in part because changes to immigration rules will reduce the supply of EU workers.

He said: “The Government is talking about a minimum £30,000 salary threshold for migrant workers.

“That’s a blunt instrument. £30,000 isn’t a high salary in London but it looks very different in places like Cumbria where the hospitality sector depends heavily on migrant workers.

“We advocate a common-sense approach that allows businesses to use migrants to fill gaps if people can’t be recruited locally or nationally.”

Around 70 business people attended the breakfast briefing at Carlisle United’s Brunton Park.

Rob Johnston, Chief Executive of Cumbria Chamber of Commerce, said: “The turnout shows there’s a real appetite from businesses for impartial and unbiased advice.

“Suren offered that. He wasn’t alarmist but he provided perspective on potential Brexit risks and what businesses should be doing to prepare.

“We’re directing businesses to the Brexit Insight section on the Cumbria Business Growth Hub website, which contains a wealth of information on Brexit planning.”

We have recorded a podcast with Suren Thiru in which he considers the implications of a no-deal Brexit and the outlook for growth, interest rates, recruitment and investment. 

 

 

 

© Cumbria Chamber of Commerce