No-deal Brexit harming UK now warns CBI

THE risk of a no-deal Brexit is harming Britain “right now”, the head of the CBI has warned, adding that threatening to leave the EU without a deal “is a bit like saying ‘if you don’t do what I want, I’ll shoot my foot off ’.”

Dame Carolyn Fairbairn, directorgeneral of the business group, added: “It’s not that the Brexit uncertainty and fear of no deal is going to have an impact in the future, it’s having it right now. This is a situation of enormous urgency.”

Boris Johnson, the leading contender to be the next leader of the Conservative party and prime minister, has vowed that the country must leave without further delay. “If I get in, we’ll come out deal or no deal on October 31,” he said in his campaign video. But Dame Carolyn said this is a dangerous tactic. “I’ve never felt it was a particularly credible negotiating threat,” she said told Bloomberg. “It was a bit like saying ‘if you don’t do what I want, I’ll shoot my foot off.’ Right from the beginning it was so harmful to us.”

Economists at ING estimate there is a 20pc chance of leaving without a deal. They believe it is more likely that Parliament would force a general election than let a no-deal Brexit take place, or that enough pro-brexit MPS would back a “tweaked deal” to secure the departure and move on to trade talks – the next stage of leaving.

“A new prime minister could easily find themselves boxed in by the same hurdles as Theresa May. Ironically, this means there is a fairly good chance that a new leader will kick the can down the road for another six months, to allow more time to break the deadlock,” said James Smith at ING. “The uncertainty surrounding the process will continue to restrict economic growth.”

The economy expanded by 0.5pc in the first quarter of the year, boosted in part by businesses stockpiling supplies and completed goods. Companies are now running down those stockpiles, hitting demand and setting the scene for a fall in GDP of 0.2pc in the second quarter, Oxford Economics believed.

The Institute of Directors told businesses to prepare for a no-deal exit. “If businesses can’t have faith in politicians, that means they have to look out for themselves,” said Edwin Morgan, interim head of the IOD.