trending Market Intelligence /marketintelligence/en/news-insights/trending/lGsKUtAebDoOSJDrOWsDbg2 content esgSubNav
In This List

Reports: UK preparing to trigger no-deal Brexit contingencies as deadline looms


Bank failures: The importance of liquidity and funding data


Silicon Valley Bank Uncovering Regional Bank Stress with Equity Driven Credit Models

Case Study

A Scorecard Approach Helps a Bank Assess Credit Risks with Smaller Companies


Banking Essentials Newsletter: 8th March Edition

Reports: UK preparing to trigger no-deal Brexit contingencies as deadline looms

The U.K. government is reportedly preparing to implement emergency plans for a no-deal Brexit ahead of the country's March 29 date for departure from the EU as a request for a short extension awaits response from European leaders and the chances of Parliament passing a withdrawal agreement dwindle.

No-deal plans are set to be applied March 25, unless a delay to the departure is finalized by that time, the Financial Times reported, citing Whitehall officials.

Dubbed Operation Yellowhammer, the no-deal plans aim to ensure a sufficient supply of food and fuel in the U.K., as well as a stable banking system, in case the country crashes out of the EU without a deal.

U.K. Brexit Secretary Stephen Barclay told Cabinet ministers that the government will continue preparing for a no-deal scenario even if a delay to the departure is confirmed, the FT said, citing a letter that it said was leaked to The Daily Telegraph. The British Cabinet will then need to decide whether to ramp up or scale back the no-deal preparations, depending on the length of delay, Barclay reportedly said.

Separately, the European Council on March 19 adopted additional temporary contingency measures to mitigate the impact of a no-deal Brexit to industries such as transport, fisheries and dual-use items. Michel Barnier, the EU's chief Brexit negotiator, had also said all preparations for a no-deal Brexit scenario should be finalized.

British Prime Minister Theresa May formally requested that the EU extend the current March 29 Brexit deadline until June 30, but European Council President Donald Tusk said such an extension will only be possible if British lawmakers agree on a withdrawal deal. The 27 EU heads of state are set to discuss May's proposed extension, which they need to unanimously approve, at the European Council meeting March 21-22.

U.K. House of Commons Speaker John Bercow said May's Brexit deal cannot be put to a vote again in the chamber without substantial changes, given that it was already rejected twice. May said she still plans to bring her deal back to the chamber and table a motion as soon as possible.

But May's deal now has only a 20% probability of being approved by Parliament in the first half of 2019, down from 35% previously, according to JP Morgan analyst Malcolm Barr.

The most likely outcome for Brexit, with a 30% probability, is the U.K. holding a national election with a potential Brexit extension into the second half, Barr said in a note to clients, as reported by Reuters.

Jeremy Corbyn, leader of the opposition Labour Party, said March 21 that he will try to renegotiate the terms of the withdrawal agreement with EU negotiators to prevent a no-deal Brexit. He blamed the government for not looking for a "constructive alternative," Reuters also reported.