No-deal Brexit trading would be highly disruptive

Subject

Brexit and trade.

Significance

As both candidates for the Conservative Party leadership say they would countenance the United Kingdom leaving the EU without a deal on October 31, the likelihood of a no-deal Brexit is increasing.

Impacts

• A no-deal Brexit would leave the legal status of UK citizens residing in the rest of the EU uncertain.
• It would cause the pound to depreciate, partially offsetting tariffs and the costs of customs procedures.
• The EU will likely insist that any future trade agreement is contingent on London fulfilling its financial obligations for leaving the bloc.