Bank of England governor urges banks to step up no-deal Brexit plans

Bank of England warns banks about no-deal Brexit risk - Sky - Reuters

The governor of the Bank of England (BoE) has told Britain’s biggest lenders to intensify preparations for a ‘no trade deal’ Brexit amid growing signs of deadlock between London and Brussels.

Sky News has learnt that Andrew Bailey said during a call with bank chief executives on Tuesday that they should accelerate planning for the UK ending the transition period at the end of the year without an agreement.

The instruction came as Britain’s major high street banks grapple with the impact of the coronavirus pandemic on their balance sheets, with tens of billions of pounds of soured loans expected to materialise as a result of the crisis.

Mr Bailey’s remarks during the private call with bank bosses led one to infer that there had been a shift in the Bank of England’s assumptions about the outcome of the ongoing talks between the UK and the European Union.

Boris Johnson’s government has repeatedly ruled out seeking an extension to the transition period, with any request for a one-year or two-year extension needing to be formally lodged by the end of this month.

A final round of trade negotiations before the end-of-June deadline got underway this week, but have been hampered by an impasse over fishing rights.

The talks are scheduled to end on Friday, with a breakthrough looking elusive.

source: sky news

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