Mnuchin Says Hard Brexit a ‘Realistic Outcome,’ Urges Agreement

(Bloomberg) -- Treasury Secretary Steve Mnuchin said the U.S. financial system is preparing for the U.K. to crash out of the European Union without a deal, and warned it would cause global disruptions.

“We need to be prepared for a hard Brexit as a very realistic outcome,” Mnuchin said Tuesday during a hearing before the House Financial Services Committee, adding that the U.S. has encouraged the U.K. and the union to find a suitable resolution.

Yet Britain’s exit from the EU looks set to be delayed by as long as a year in a blow for Theresa May that risks a destabilizing backlash at home.

European Council President Donald Tusk on Tuesday rejected May’s request for a brief postponement to end the U.K.’s membership, saying it would create a “rolling series of short extensions and emergency summits, creating new cliff-edge dates.”

The prospect of a lengthy extension was good news for British business after months of uncertainty. But a long delay would mark another political defeat for May, who had promised repeatedly to take the U.K. out of the EU by March 29.

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