Law firm Clifford Chance says financial services and the automotive sector would be hardest hit in the absence of a deal between the UK and Europe.
A report by Clifford Chance has estimated the cost of a so-called "no deal" Brexit scenario would total around £31 billion for EU exporters and around £27 billion for UK exporters. Research carried out by consultancy Oliver Wyman for the Magic Circle law firm indicates that Brexit tariff and non-tariff barriers are expected to cost UK firms around £27 billion and EU exporters £31 billion. The automotive sector will be hardest hit in the EU27, while in the UK, financial services will incur the highest extra red tape costs.
Clifford Chance partner Jessica Gladstone says: 'Given the difficulty of knowing exactly what turbulence lies ahead many businesses are putting Brexit in the 'too hard' box, but failing to prepare is preparing to fail. Exporters that understand exactly what Brexit's risks and rewards could be for them will be able to implement the right plans at the right time to ensure that they are one of the winners rather than one of the losers.'
'We see the best-prepared firms taking hedges now based on the direct impacts on themselves, their supply chains, customers and competitors. Unfortunately, we see that small firms are least able to take these steps at present,' Kumar Iyer, partner at Oliver Wyman, said in the report. Source: Clifford Chance