UK Plc prepares for messy Brexit as clock ticks down

LONDON, (Reuters) - British companies selling everything from washing machines to flights, food and mortgages plan to spend tens of millions of pounds in case the political brinkmanship gripping the country leads to a disorderly Brexit.

With barely four months until the world’s fifth largest economy leaves the European Union, a raft of major companies set out plans on Tuesday to counter any trade delays and downturns that could stem from a no-deal scenario.

Electrocomponents, which stocks more than half a million industrial and electronics products, said it would spend 30 million pounds ($38.6 million) in the six months to the end of next March to increase its holding of high-turnover goods in Britain and Europe.

AO World, the online electricals and white goods retailer, might increase stock to mitigate supply chain friction while Compass, the world’s biggest catering firm, is looking to build inventory and vary menus before March 29.

“We are planning very seriously for all scenarios,” said Chief Executive Dominic Blakemore of Compass which provides meals for train customers, hospitals and corporate headquarters.

“We have been working with our suppliers for quite some time to think about how we carry a bit more inventory, how we source supply and how we vary our menu.”

Britain’s vote to leave the world’s largest trading bloc has created a raft of challenges for companies, with financial services groups shifting some assets and people to Europe while manufacturers hunt for storage space to stockpile parts.

Supporters of Brexit say once it has left the country will be free to negotiate new trade deals around the world and ditch regulations they say hamper growth.

But mounting tensions in Westminster, where lawmakers from all parties are opposed to Prime Minister Theresa May’s Brexit deal, have sparked fears Britain may leave the EU with no deal, prompting customs checks that clog up borders and fracture long-standing supply chains.

Issues being addressed include stockpiling, changes in suppliers and production, and changes to regulation.

Hours after a handful of companies put out their plans at 0700 GMT, the Bank of England had some sobering words.“I have the impression from talking to businesses (...) that most are not prepared for a no-deal Brexit, and don’t know really how to,” Bank policymaker Michael Saunders said. Those companies with a plan are pushing ahead. British low-cost airline easyJet, which carried 88.5 million passengers in its latest financial year, has changed its legal structure and secured new operating licences to enable it to continue flying into Europe.