According to analysis by market insurer Atradius, a no-deal Brexit will cause short-term uncertainty, is likely to push inflation higher and will create trade frictions.
This, according to their report, will suppress the UK GDP and may push businesses insolvencies in the UK up by 14% when compared with an ‘smooth transition’ exit with an agreed deal. No deal will also affect the EU27 countries who will see a fall in GDP, but it will of course be much lower than in the UK market at an estimated 0.5% higher than with a deal.
The effect on EU27 is still described as being ‘significantly negative’, particularly in places with close trade ties such as Ireland, Belgium, The Netherlands and Denmark.
Retail, manufacturing and chemical sectors are set to be the most affected with or without a deal as trade barriers are imposed. The report goes on to assess the countries most likely to be affected, the likely disruption from a no-deal result and estimates for the impact on the UK economy and GDP. You can read the full article and download the report here.