Half of Firms Less Prepared for Brexit Due to Virus Impact
(Bloomberg) -- About half of U.K. firms are less prepared for Brexit compared to last year due to the impact of the coronavirus pandemic, a sign of Britain’s vulnerability to disruption when it quits the European Union’s single market and customs union at year-end.
Some 46% of businesses say they are in a worse position due to the virus, which has depleted financial reserves and stockpiles, according to a survey by the Chartered Institute of Procurement & Supply, which questioned 557 U.K. supply chain managers between Sept. 23 and Oct. 5. And 16% of companies say stocks will run low this winter because of the impact of Covid-19.
The U.K. government has increased the urgency of its campaign to urge businesses to prepare for Britain’s final split from the EU on Jan 1., when companies will face new red tape such as customs declarations to keep goods flowing with its largest trading partner. Even if the U.K. and the bloc sign a trade deal -- which has looked increasingly unlikely with negotiations on the rocks -- companies will need to comply with new formalities to legal trade.
“The transition period was designed to provide businesses with more time to prepare for Brexit, but the Covid-19 pandemic has undone much of that hard work,” said John Glen, an economist at CIPS, which has 70,000 members globally. “Deal or no-deal, time is running out.”
The situation may hit the prices shoppers pay as they get ready for the holiday season -- almost a quarter of companies say they’re paying more for goods for the year-end festivities, and will pass this along to consumers.
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