With each passing day the likelihood that Britain will leave the European Union without the transaction increases. Script so-called "hard" Breksita should shake not only the UK but also across Europe. Under the blow will be the whole sector of the economy and various companies.
The talks in London and Brussels last no longer of one year. We can not say that they are simple, as it is necessary to take into account a lot of details, and the compromise on certain points and has not been found. Due to failed negotiations lost his job, former British Prime Minister, Theresa May, who was forced to leave his post as the Parliament refused to ratify the treaty to which it has come from Brussels.
The political conflict between the two countries has now become a "trench warfare". The new Prime Minister of the United Kingdom, Boris Johnson, yet adamant in their desire to bring the country out of the EU in any case. In his opinion, this agreement is necessary to amend paragraph about the Irish bekstope (according to which Northern Ireland will remain in the customs union after Breksita), which prevents the continuation of the negotiations. At the same time, EU leaders believe that any amendments do not have to make, and the current document is unchanged.
If London left the EU market without a trade agreement, customs union and other institutions that provide free movement of goods, services, people and money within the European alliance, will return to the general WTO rules on tariffs and border crossing rules . "Hard" Britain's output will not bring anything good to one side. Let's look at who will suffer from such a scenario the most.
The automotive sector is under attack
One of the first will be a blow to the auto industry. In this case, the victims will be hard exit both sides of the conflict.
At the moment, London's biggest exporter of German cars. Because of the uncertainty as to Breksita German exports to the UK have declined by more than 13%.
For the UK, the prospects are not rosy. Most of the famous British car manufacturers currently owned by foreign capital, but a lot is still going in the UK. Auto exports accounted for 14.4% of all British exports. In addition, the industry employs about 200 000 people, and it brings billions of pounds a year to the state budget. So, any tariffs will hit UK companies even harder than European.
The following air carriers in the list
Earlier this year, Brussels allowed to continue air travel between the United Kingdom and Europe until March next year. In turn, also went to London for a similar step.
Of course, in the case of "hard" output air traffic will continue, but as a result of a lack of agreement British companies such as: International Consolidated Airlines Group, EasyJet and Ryanair do not have the right to fly within the EU or to take passengers from the euro bloc airports in other destinations .
The financial sector is preparing for the worst
If the transaction and will not be, the British companies that are engaged in financial services will lose their "passport law", allowing them to operate throughout the single market.
It is believed that British banks are better prepared for the negative scenario than the non-financial companies. However, there is no preparation for the "hard» Brexit does not compensate for the severity of the challenges the sector will face after it.
In the case of a negative scenario in the UK two years plunged into a recession, and it is a minimum. EU economy at the same time deprived of half a percentage point of GDP. Immediately after Breksita London will have to apply the provisional rules to ensure the stable operation of the financial transactions.
The technical picture of the market
Technical picture on the British pound is now ambiguous. If at the beginning of the month of experts was asked where to send the pound, they would have clearly said - "just down". Now the situation has changed. Boris Johnson's meeting with German Chancellor Angela Merkel has changed the balance of power in the foreign exchange market. Merkel gave Johnson a month to find a compromise on bekstopu and her optimism gave traders hope to resolve the conflict. Immediately after this news the pound soared, and as we have seen, and yet does not think to come back down.
On Thursday, August 22 pair pound / dollar rallied to a level of 1.2250, and if a positive attitude persists, then it is easy for the next week to reach 1.2350 area. In truth, any positive news on Breksita in subsequent weeks will definitely push up the pound, and there is no limit to the growth of the asset. In the most optimistic scenario, the asset in the next 30 days could reach the area of 1.2450 - 1.2430.