Hard Brexit is the most likely outcome - PwC warns
Accountancy firm flags significant uncertainties one year out from UK departure from EU
In its Spring Brexit update, PwC has said that a hard UK exit is still the most likely outcome. Photograph: iStock
Big-four accountancy firm PricewaterhouseCoopers, is sticking with its view that a hard Brexit is the most likely outcome with less than one year to go until the UK formally leaves the European Union.
Although the firm welcomes recent progress on the draft withdrawal agreement, significant uncertainties remain including the Border and issues over governance, it says.
Feargal O’Rourke, the company’s managing partner, told The Irish Times that while a hard Brexit is the worst outcome, it is one companies need to prepare for on the basis of the slow nature of progress.
“All in all, on the balance of probabilities, we still think it’ll be a hard Brexit...I’m not sure we’re going to see anything for the next two months that would allow us to switch position,” he said, noting that PwC will re-evaluate after the upcoming June summit of EU leaders.
Part of the problem, Mr O’Rourke suggests, is that the message from the UK is mixed.
“There are a lot of moving parts and the fact is that the British position is still not entirely clear,” he said, predicting that the UK would head in the direction of a Canadian-type free-trade agreement.
A hard Brexit would mean the UK would leave the EU at the end of March 2019 without a future trade agreement, leading to the imposition of World Trade Organisation tariffs and possible lengthy customs checks at ports and airports.
PwC’s Spring update, Brexit: Lighting the way, also flags concerns over the agreement on the future trade framework and the dispute resolution mechanism needed for future trade.
“The UK’s lack of willingness to consider a customs union, and continuing talk of “cherry-picking” which arrangements it does or does not want to retain, means that an orderly hard Brexit remains too likely for businesses to ignore,” the report says.
David McGee, Brexit task force leader for PwC Ireland, suggests that border infrastructure of some type will be required as a result of the UK’s desire to leave both the single market and the customs union.
“With all of the moving parts, it is very difficult to see the end game. There is no room for complacency,” Mr McGee says, again noting the necessity for businesses to have contingency plans in place.