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Most UK export firms still not ready for a no-deal Brexit

Tom Belger
·Finance and policy reporter
A woman takes a photograph of a mural by street artist Banksy showing a star being chiselled from the European flag in Dover, south east England, Monday, Jan. 7, 2019. Britain is testing how its motorway and ferry system would handle a no-deal Brexit by sending a stream of trucks from a regional airport to the port of Dover — even as some legislators try to pressure the government to rule out the scenario. (AP Photo/Matt Dunham)
A mural by street artist Banksy showing a star being chiselled from the European flag in Dover. Photo: AP Photo/Matt Dunham

Most UK firms which export to Europe are still unprepared for a no-deal Brexit, according to official figures.

Around 60% of exporting companies have still failed to complete key paperwork almost two months after Britain was initially due to leave the EU on 31 March.

Around 150,000 companies could find themselves legally prevented from continuing to trade with European partners unless they register with HMRC before Brexit.

Applying for an ‘economic operator registration and identification’ (EORI) number is just one of the new hurdles UK firms could face if Britain leaves without an agreement.

Boris Johnson, the frontrunner in the race to be the next Tory leader and UK prime minister, has talked up the importance of Britain leaving with or without a deal by November.

READ MORE: Carney slams Johnson’s Brexit trade deal plans

Governor of the Bank of England Mark Carney highlighted the figures on UK firms’ preparedness in an interview on BBC Radio 4’s Today programme on Friday morning.

He said only 40% of the 250,000 firms expected to need an EORI number to trade had applied, but said it was twice the number which had applied six months ago.

But he added: “Industry has continued to work on being prepared. The main thing business was doing in the run-up to the deadline at the end of March was to build stock, so they could try to supply the UK market as much as possible.

“They’ve done that. Those stocks are sitting there.”

READ MORE: Bank governor gives Facebook’s Libra a cautious welcome

He warned business stockpiling only provided “a very short-term level” of preparedness, and said it was “extremely difficult” to do in sectors like car making.

About three-quarters of businesses today would say ‘we’ve done as much as we can do.’ It doesn’t mean thery’re fully ready-far from it.

“Business will be reliant on what the governments are able to do in order to keep the ports open and trade flowing.”

He also used the interview to wade into the final round of the Conservative leadership contest, slamming frontrunner Boris Johnson’s Brexit trade plans.

Carney challenged Johnson’s claim that he would be able to stop Britain facing significant disruption to trade from new tariffs if it left the EU without a deal.

READ MORE: Bank of England holds rates at 0.75% as risks to growth increase