Northern Ireland businesses need to prepare for a ‘no deal’ Brexit, as a potential worse case outcome, and not get caught up in the fast-changing political situation around the UK’s exit from the European Union.
That was one of the key messages to emerge from Danske Bank’s Planning for Brexit event held this morning in the bank’s flagship branch on Donegall Square, which was attended by more than 120 business customers.
Speaking at the event, Danske Bank Chief Economist Conor Lambe said that it was now very difficult to predict whether there would be a deal, no deal, an extension of the Article 50 process, an election before October 31 or an election after the current deadline for leaving.
“The Brexit process is becoming increasingly unpredictable with a number of potential options all still possible. But with less than two months to go, businesses should behave prudently and prepare for a no deal Brexit so they are as ready as they can be in case this worst case scenario becomes reality on October 31,” he said.
Also speaking at the breakfast was Danske Bank head of Treasury & Markets John-Paul Coleman, who said that a no deal outcome is likely to see sterling move lower and potential for a lot of volatility for businesses who have an exposure to currency.
But he also said the current low interest rate environment, which has also been driven by slow global growth, trade wars and international political uncertainty, represented an opportunity for businesses to gain some certainty by considering fixing interest rates on their borrowing.
“We still recommend you hope for the best and plan for the worst. It’s not a time to pause for thought, but to look at whether you have a currency risk exposure and over what time period,” he said.
“Where exchange rates are concerned there is always a temptation to think ‘it’s going my way’ and waiting for longer but businesses need to stick to their budget and be disciplined enough to close out exposures when budget is hit.”
The Planning for Brexit event also heard from Grant Thornton’s tax partner Peter Legge, director of business risk services Frankie Cronin, director, indirect taxes Lee Squires and director of people and change Anne Phillipson.
They laid out some practical steps business should be taking to prepare, advising businesses to review the conformity of their products to EU rules, review their approach to data, review contracts for clauses relating to the EU and force majeure, and explore sector specific changes – particularly in sectors such as financial services, pharmaceuticals and life sciences.
They also encouraged firms to apply for the financial assistance on offer for Brexit planning from Invest NI and InterTradeIreland.