UK economy grows at fastest tick in nearly 2 years

November 11, 2018

Official figures show that the UK economy grew in the third quarter of the year at its fastest pace for nearly two years.

The Office for National Statistics said Friday that the economy expanded by a quarterly rate of 0.6 percent in the July to September period. That’s up from the previous quarter’s 0.4 percent and the highest recorded since the fourth quarter of 2016, just after the country voted to leave the European Union.

The statistics agency said the hot summer weather helped boost consumer spending, particularly of food and drink.

Related: What impact is Brexit uncertainty having on the UK economy?

The high growth figure for the July-September quarter means UK economy grew faster than the 0.2 percent quarterly tick recorded by the 19-country eurozone during the period.

Source: Business Insider UK

Carney says this is as good as it gets for growth

November 3, 2018

The current rate of growth is as good as it gets for UK consumers, Mark Carney has said.

Mark Carney, the governor of the Bank of England was speaking after the central bank decided to leave interest rates unchanged at 0.75 per cent.

Mr Carney said the UK economy was “probably growing about as fast as it has capacity to without pushing up prices quickly”.

In fact the Bank of England cut its forecast for UK growth by 0.1 per cent for this year and next.

The definition of how fast an economy can grow without a sharp rise in inflation is called the trend rate of growth.

An economy can grow much faster than the trend rate in the short term but this leads to higher inflation, which typically provokes the central bank to raise interest rates quickly, which tends to reduce economic growth.

An economy growing at markedly above or below the trend rate of growth does so because of government or central bank policy, before reverting to the trend over time.

The Bank of England’s assessment was made before the Budget of 29 October, in which Chancellor of the Exchequer Philip Hammond unveiled tax cuts and increased public spending, initiatives which both Mr Hammond and his Labour Party counterpart John McDonnell said would stimulate growth in the short term.

Andy Haldane, the Bank of England’s chief economist has said the UK leaving the European Union was likely to reduce the long-term trend rate of growth to 1.5 per cent, down from the previous level of 2 per cent.

Mr Haldane’s view was that the trend rate of growth in the economy was determined largely by the size and productivity of the working age population.

Related: What impact is Brexit uncertainty having on the UK economy?

He said migration into the UK was likely to fall after Brexit, reducing the size of the working age population and so reducing the trend rate of growth. He said migrant workers were, in aggregate, more productive than native workers so a reduction in migration would also reduce the trend rate of growth.

Laith Khalaf, senior analyst at Hargreaves Lansdown, said the uncertainty around the outcome of the Brexit negotiations meant the Bank of England had little choice but to leave interest rates unchanged.

He said the central bank painted a “dreary” picture of the long-term growth potential for the UK economy which indicated interest rates would remain low relative to history for the long term.

In the quarterly inflation report, released alongside the interest rate decision, the Bank of England said it expected to put interest rates up in the next 12 months if the economy continued on its current trajectory, but also said it may have to put interest rates up in the event of a disorderly Brexit, even if economic growth has slowed dramatically, to prevent sterling collapsing in value and delivering an inflation shock to the economy.

David Cheetham, chief market analyst at XTB, said the market reaction to the news was muted because various aspects of the Bank of England’s communication were “mixed”.

Paul Stocks, financial services director at Dobson and Hodge, said Brexit was one of many issues facing investors now, but he was trying to invest on behalf of clients for a longer term time frame.

He said he tended to have more global funds in his clients portfolios than UK ones due to a wave of issues.

Bill Casey, a UK equity fund manager at Schroders, said he was investing more in UK companies that have defensive characteristics.

Source: FT Adviser

Budget 2018: Philip Hammond has ‘backed himself into a corner’ if Brexit hits UK economy, says IFS

November 1, 2018

Philip Hammond will find himself stuck in “a corner” if Brexit goes badly after he announced a spending splurge in his set-piece Budget, a think tank has warned.

The Institute for Fiscal Studies said the Chancellor had taken “a gamble” by splashing better-than-expected tax takes on the NHS, roads and the armed forces, among other things.

It said Mr Hammond will have to choose between a return to austerity, big tax rises or greater borrowing if Brexit deals a blow to the British economy.

The Chancellor declared to the Commons that austerity was “finally coming to an end” as he pumped much of a £78bn fiscal windfall into a multitude of giveaways at the Budget yesterday.

According to the IFS, Mr Hammond got “lucky” with improved tax takes despite sluggish growth, and decided to splash the cash rather than use it to pay down the deficit.

At a post-Budget briefing today, IFS director Paul Johnson warned that there were “huge amounts of uncertainty” in the improved financial forecasts, “not least given Brexit”.

“What the Office for Budget Responsiblity gives this year it can quite easily take away next year,” he explained.

“If forecast borrowing goes up I think the Chancellor has painted himself into a bit of a corner.

“He is going to struggle to impose austerity having announced its end – but could he resort to sizeable tax rises given his lack of majority? I doubt it. More likely he’ll allow borrowing to persist at a higher level.”

He added: “When push comes to shove it’s not tax rises and it’s not the NHS that Mr Hammond is willing to gamble on, it’s the public finances. Because yesterday’s Budget was a bit of a gamble.”

Related: Chancellor says no deal Brexit will damage UK GDP for years to come

Mr Hammond had said at the weekend that failure to secure a Brexit deal could force him to change his spending plans – but he was slapped down by No 10.

The IFS said it was unable to determine whether austerity had actually ended – as Theresa May claimed in her party conference speech earlier this month – since overall spend was up but some departments are still set for cuts.

It added that some £4bn in welfare cuts were yet to come into force – despite the Chancellor handing extra cash to the under-fire Universal Credit system yesterday.

And it said Mr Hammond could have paid down the deficit by 2023, as promised in the Tory manifesto, if he had banked the extra windfall instead of spent it.

“Any idea that there is a serious desire to eliminate the deficit by the mid-2020s is surely for the birds,” Mr Johnson said.

‘AUSTERITY COMING TO AN END’

Responding to the IFS, Chief Secretary to the Treasury Liz Truss said: “This Budget showed how the hard work of the British people is paying off, with our balanced approach providing a solid economic recovery which means austerity is coming to an end.”

She said the Government was “providing more support to public services” and “investing for the long-term” but was “also clear that discipline remains”.

Labour leader Jeremy Corbyn had blasted what he branded the “broken promise Budget” as he insisted austerity was still going strong.

It came after another think tank – the Resolution Foundation – said tax changes in the Budget handed a big boost to the richest members of society.

Source: Politics Home

UK budget and Bank of England take back seat to Brexit drama

October 28, 2018

UK budget announcement on Monday and a “Super Thursday” at the Bank of England would normally be key moments for the world’s fifth-biggest economy, but this time they are likely to be overshadowed by the drama of Brexit.

Finance minister Philip Hammond and Bank of England Governor Mark Carney have little option but to sit on the fence as they wait to see whether a no-deal exit from the European Union, which they warn would harm the economy, can be averted.

Both men have other business they want to get on with.

Hammond is under pressure from Prime Minister Theresa May to end a decade of austerity to see off a rise in popularity of the opposition Labour Party.

At the BoE — where an interest rate decision and economic forecasts are due to be announced on Thursday — Carney and his fellow policymakers want to progress with their plan to raise borrowing costs gradually over the coming years.

That would allow the British central bank to follow the lead of other central banks, especially in the United States and Canada, which are dismantling 10 years of massive stimulus.

Expectations of another rate hike by the U.S. Federal Reserve in December are likely to grow if the monthly payrolls report on Nov. 2 shows further jobs growth and rising pay.

In the euro zone, data on economic growth and inflation on Tuesday and Wednesday will show whether the recovery in the single currency area has kept pace.

But in Britain, with Brexit just five months away, things are much less clear cut.

BREXIT FOG

There is no sign of a Brexit breakthrough with Brussels, in large part because May’s Conservative Party is riven over how close Britain should remain to the European Union after it leaves the bloc.

“UK budget is likely to be something of a holding exercise until the Brexit fog clears and the MPC is likely to remain in a state of inertia until there is a bit more clarity on the state of the Brexit negotiations,” Ruth Gregory, an economist with Capital Economics, a research firm, said.

When he stands up in parliament on Monday afternoon, Hammond is expected to use his high-profile UK budget speech to try to cool the Conservative rebels by dangling the prospect of higher spending in the future, as long as a Brexit deal is done.

Britain’s economy has slowed since the 2016 referendum decision to leave the EU. But it has not suffered as badly as many forecasters expected, giving Hammond some fiscal wiggle room to fund higher health spending already promised by May.

Hammond might get further help if UK budget forecasters scale back their estimates of future deficits, as they have suggested they will.

But his ability to ramp up spending in other areas depends most on avoiding a new shock to the economy.

A no-deal Brexit would slash economic growth to just 0.3 percent a year in 2019 and 2020 compared with 1.9 and 1.6 percent if there is a deal, the National Institute of Economic and Social Research estimated on Friday.

UK budget deficit would stop falling and would rise under a no-deal scenario, according to its forecasts.

Looking further ahead, Hammond has suggested he will need to raise taxes to help fund higher public spending.

SIGNS OF PAY “NEW DAWN”

But the prospect of getting controversial measures passed in parliament, where the Conservatives have no outright majority, is probably too daunting at a time of heightened Brexit tensions.

For the BoE, the Brexit stakes are high too.

It has begun raising interest rates from their crisis-era levels and its chief economist has said he sees signs of a “new dawn” for British workers’ pay, long the missing link in the country’s recovery from the financial crisis.

Related: Chancellor says no deal Brexit will damage UK GDP for years to come

But most economists think it will wait until May to raise rates again, assuming Britain leaves the EU with a deal.

“In any other situation, we suspect the Bank of England would be looking to increase interest rates pretty soon,” ING economists said in a note to clients on Friday.

“But inevitably, Brexit remains policymakers’ number one consideration, and given that there may still be some time before we know for sure whether a deal will be in place before the UK formally leaves the EU, there is a risk growth slows as businesses and consumers grow more cautious.”

Source: UK Reuters

Firms to launch Brexit contingency plans before Christmas

October 22, 2018

The majority of British businesses are preparing to launch contingency plans before Christmas as hopes of a Brexit deal fade.

A survey of 236 businesses for the Confederation of British Industry (CBI) found that many will make “damaging” moves which will include cutting jobs and relocating work overseas.

The survey focused on companies employing fewer than 500 people and it found that 82% will start to implement their contingency plans by December if the Brexit process does not get any clearer.

The news comes as fears grow that the UK could leave the European Union in March without a deal, resulting in tariffs on exports, border checks and travel restrictions.

CBI director general Carolyn Fairbairn said the situation was “urgent”, adding: “The speed of negotiations is being outpaced by the reality firms are facing on the ground.

“Unless a withdrawal agreement is locked down by December, firms will press the button on their contingency plans.

“Jobs will be lost and supply chains moved.

Related: What impact is Brexit uncertainty having on the UK economy?

“The knock-on effect for the UK economy would be significant: living standards would be affected and less money would be available for vital public services including schools, hospitals and housing.”

Ms Fairbairn said the uncertainty was “draining investment” from the UK, adding: “From a multinational plastics manufacturer which has cancelled a £7m investment, to a fashion house shelving £50m plans for a new UK factory, these are grave losses to our economy.

“Many firms won’t publicise these decisions, yet their impact will show in lower GDP years down the line.”

According to the CBI, 80% of companies said Brexit had already had a negative impact on their investment decisions, more than double the 36% that said the same a year ago.

Two-thirds said Brexit had affected how attractive the UK was to investors. One in four said it had no impact.

Last week’s summit between prime minister Theresa May and Europe’s leaders made little progress towards a deal and a second summit in November has been called off.

The next meeting is scheduled for December but, even if a deal is reached, there is no guarantee that parliament will approve it.

A spokesman for the Department for Exiting the European Union said: “We are working hard to deliver a deal that works for businesses and remain confident of a positive outcome.

“In the unlikely event we leave the EU without a deal, we have issued over 100 technical notices to help businesses make informed plans and preparations.

“We have engaged extensively with businesses and industry bodies from all sectors of the economy throughout the exit process and will continue to do so.”

Source: Yahoo News UK

Brexit uncertainty set to hobble UK economy through winter

October 21, 2018

The uncertainty over Brexit that’s hobbling the British economy is set to go on for longer than expected, leaving companies and households in a limbo.

When Britain triggered the two-year timetable to leave the European Union, October’s summit of EU leaders was supposed to be the moment a Brexit deal would be agreed on to give parliaments the time to pass it into law ahead of March’s departure.

A deal at Wednesday’s summit would have lifted some of the pall that’s hung over the British economy since the Brexit vote of June 2016. Instead, British Prime Minister Theresa May wasn’t able to secure an agreement and EU leaders cancelled a Brexit summit in November. That suggests there won’t be any deal until December — at the earliest. Even if May does secure one, there is no certainty she can get it approved by her own, divided parliament.

The worry is Britain could crash out without a pact on future relations with the EU or without even a transition period to ease its exit — what has become known as a “hard Brexit.” Tariffs would be placed on exports, border checks would be reinstalled, and restrictions could hit travelers and workers. Some are warning of shortages in markets like medicines and even sperm donations.

“For the economy, this could see growth momentum slow again over the winter as uncertainty rises,” said James Smith, developed markets economist at ING. “With businesses becoming more vocal about the impact ‘no deal’ would have on operations, households may begin to take a more cautious stance if they gradually become more wary about their job security.”

Related: 5 ways life could become harder for British people if there is a no-deal Brexit

Consumers have become cautious, cutting down on spending as a fall in the pound after the Brexit vote pushed up prices for imports. The housing market has cooled, particularly in parts of London. And companies have become more hesitant to invest. From being the fastest-growing Group of Seven industrial economy prior to the Brexit vote, Britain is now one of the slowest.

According to the International Monetary Fund, U.K. growth this year is expected to be a muted 1.4 percent. After Wednesday’s summit, the risk is it could be even lower if firms become more cautious.

“Business’ patience was already threadbare and is nearing an end,” said Carolyn Fairbairn, director-general of the Confederation of British Industry, a lobby group that represents mainly big firms.

British businesses are particularly open to foreign markets, investing heavily abroad, hiring foreigners and exporting to other markets, particularly the EU, the biggest destination for British goods.

Research published Thursday by the British Chambers of Commerce and DHL Express U.K. showed the extent to which Brexit is making life difficult for firms.

In a survey of 2,530 small and medium-sized companies conducted in August, the BCC found that 49 percent of firms have Brexit “front of mind” when deciding whether to trade internationally and that highlights “the economic cost of the persistent lack of political clarity.” A similar number are also concerned about the pound’s volatility — the currency fell sharply after the Brexit vote and it has continued to swing sharply.

“Firms have been dealing with uncertainty over the future relationship with the EU since the referendum vote over two years ago,” said BCC director-general Adam Marshall. “This survey shows that, as we get closer to the crunch, the lack of precision is starting to have a material impact on their decision-making.”

If and when a deal is struck, the detail will have a big impact on business decisions.

Any deal that sees Britain remain closely aligned to the EU’s regulations may mean firms won’t be able to tap other markets around the world, as Britain could be bound by EU trade deals and regulations.

Some prominent Brexit proponents — including James Dyson, the founder of the eponymous vacuum cleaner, and Tim Martin, the chairman of pub chain Weatherspoon’s — say Britain should agree on only loose ties with the EU to have the freedom to make new trade deals.

Some big companies are becoming increasingly vexed by the impasse. This week, ahead of the summit in Brussels, pharmaceuticals giant AstraZeneca and carmaker Ford issued statements raising doubts about their investments in Britain.

They’re worried about supply chains being clogged up, and about their ability to use Britain as a base to access the rest of the European Union. Steven Armstrong, Ford’s group vice president, said a so-called “hard Brexit” is a “red line” for his company.

“It could severely damage the U.K.’s competitiveness and result in a significant threat to much of the auto industry, including our own U.K. manufacturing operations,” he said.

“We will take whatever action is necessary to protect our business in the event of a hard Brexit.”

Source: Business Insider UK

What impact is Brexit uncertainty having on the UK economy?

October 13, 2018

The Brexit vote to leave the European Union (EU) made by the UK electorate in June 2016, plunged the UK into economic uncertainty.

The debate facing policy makers up to that point in 2016 was how to square the circle of improved economic growth and falling unemployment with a lack of real wage growth, and sluggish productivity.

Those problems haven’t gone away, but have been swept from the consciousness of policy makers, the public, and their financial advisers faced with the challenge of understanding what the economic climate will look like when the UK exits the EU.

Jeremy Lawson, an economist at Aberdeen Standard Investments, says the reason many policy makers, economists and advisers, including himself, are perceived to have been wrong about the economic situation in the aftermath of the Brexit vote, is because the change that happened in the economy was a “supply shock”, and not a “demand shock”.

Mr Lawson explains: “Economists – because most economists are in favour of remain – forgot that if a majority voted to leave, well, that majority were not shocked by the outcome, so they didn’t stop spending or change their behaviour.”

Supply and demand

Demand shocks tend to have a more immediate impact on the economy as people stop spending, while supply shocks lead to lower growth over the longer term.

Mr Lawson’s point is that demand shocks happen when the general public think their immediate economic prospects will become worse, and so reduce spending, causing the level of demand for goods and services to fall, and send the economy into recession.

He says that leave voters were happy with the outcome and therefore didn’t think their economic prospects had weakened, so continued to spend, meaning demand didn’t fall.

A supply shock happened because the fall in the value of sterling caused input costs for goods and services to rise – for example, oil and metals. This makes it more expensive for those who supply goods and services to do so, limiting supply, while investors pulling capital out restricts the supply of capital in the economy, and workers leaving the country restricts the supply of labour.

All of those things are harmful to the long-term health of the economy, but the effects are felt in small doses over a prolonged period of time, rather than as a sharp shock, as many had anticipated.

Andy Haldane, chief economist of the Bank of England, speaking before the Treasury Select Committee of the UK parliament in February 2018 quantified the impact of those supply shocks.

He said the long-term trend rate of growth, which is defined as the level of growth an economy can achieve in normal times without exceptional policies being pursued, will be 1.5 per cent a year as a result of Brexit, rather than the 2 per cent a year that would be the case without Brexit.

His assumptions are based on the Bank of England assuming that a deal is reached between the UK and the EU on the terms of the UK’s exit.

Source: Heartwood Investment Management

Mr Haldane’s boss, Bank of England governor Mark Carney, told the Treasury Select Committee in September that the most immediate impact of a ‘no deal’ Brexit is that interest rates would rise.

Related: Chancellor says no deal Brexit will damage UK GDP for years to come

The Bank of England has been happy to ignore the higher inflation caused by the fall in sterling that occurred in the immediate aftermath of the vote. The central bank’s view was that this inflation was temporary, and that supporting economic growth through keeping interest rates low was more important than curtailing temporary inflation.

But Mr Carney notes the inflation that would likely be the result of a no deal Brexit would be more permanent in nature, as it would be caused by a worsening of the supply shock.

The Bank of England’s view in that situation is rates would have to rise in order to protect the value of sterling, even if that means unemployment rises and the rate of economic growth slows.

Henry Dixon, a portfolio manager on the UK equities team at Man GLG, observes if sterling were to fall by more in percentage terms than the cost of tariffs on UK exports, then there could be a boost to the economy.

Mr Lawson says the shock to the economy of a no deal Brexit would wipe out any of the gains from a fall in the value of sterling, and that a recession would be inevitable.

The Bank of England’s stress tests, which seek to paint a picture of what the economy would look like in the event of a no-deal Brexit, predicted unemployment and inflation would reach levels seen in the financial crisis.

David Coombs, multi-asset investment manager at Rathbone Unit Trust Management, adds, “it is hard to see” how the UK could avoid a recession if the UK exits without a deal.

Source: FT Adviser

UK economy shows steady growth, Brexit concerns weigh on firms – PMI

October 5, 2018

UK economy appears to have kept up most of its steady growth in the July-September period, but uncertainty among companies remained high six months ahead of Brexit, a business survey showed on Wednesday.

The IHS Markit/CIPS UK Services Purchasing Managers’ Index (PMI) slipped to 53.9 in September from 54.3 in August, a shade weaker than the median forecast of 54.0 in a Reuters poll of economists.

IHS Markit said UK economy was on course to grow at a quarterly rate of just under 0.4 percent in the three months to September — the same as its average growth rate since the Brexit referendum of June 2016.

The world’s fifth-largest economy suffered a slow start to the year, when the country was hit by unusually cold weather, but grew solidly in the second quarter, albeit fuelled mostly by consumer spending rather than trade or manufacturing.

Samuel Tombs, an economist at the consultancy Pantheon Macroeconomics, said Wednesday’s figures put scant pressure on the Bank of England to raise interest rates again before the March 2019 Brexit deadline.

“The economy remains a long way from overheating and growth is likely slow further if Brexit talks aren’t amicably concluded soon, given that firms are reporting … that political uncertainty is weighing on budget setting and confidence,” he said.

IHS Markit said business optimism ticked up in September, but Brexit worries had kept it “firmly anchored” at levels that would normally indicate an imminent slowdown.

Related: What impact is Brexit uncertainty having on the UK economy?

Financial markets showed no reaction to the PMI, which was broadly as expected.

London and Brussels have yet to agree the terms of their March 29 divorce, meaning there is still a chance of a no-deal Brexit that most economists think would harm British businesses.

Other data have also pointed to steady economic growth for now, although last week official statisticians said British companies cut their investment in the second quarter of 2018.

Wednesday’s PMI also pointed to growing cost pressures faced by British companies linked to rising oil prices — something BoE officials will be watching to see if this feeds through into broader inflation pressure.

Source: UK Reuters

Britain’s economy is entering a ‘new era’ — and it has nothing to do with Brexit

September 21, 2018
  • Brexit is pretty much the only game in town for watchers of the UK economy right now.
  • But away from the UK’s exit from the EU, Macquarie said a worrying new dynamic is forming in the economy.
  • Supply-side limits on the economy, like the tight labour market, are likely to start having a negative impact.
  • Macquarie calls it a “new era” for the British economy.

In the 816 days since Britain voted to leave the European Union, Brexit has been pretty much the only game in town for watchers of the UK economy.

But there’s a deeper change going on beyond Brexit related uncertainties. Analysts at investment bank Macquarie this week described what they call the beginning of a “new era” in the UK economy.

Analyst Matthew Turner thinks low wage growth and full employment means the UK economy will struggle to grow in future unless it can crack the persistent problem of productivity.

“UK economic performance over last decade [has been] driven by greater resource utilisation on the back of strong population and employment growth,” analyst Matthew Turner wrote in a presentation titled: “A new era, even without Brexit.”

“That is now changing as supply-side limits bite, and how efficiently resources can be used will determine whether relative strong growth can be maintained.”

Related: What impact is Brexit uncertainty having on the UK economy?

Turner’s argument is that rising employment and demographic strength allowed the UK to boom in the years since the worst effects of the financial crisis wore off. But that story is now coming to an end. Economic strength could suffer as a result.

Unemployment in Britain is pretty much as low as it can go, at just 4%. Employment growth boomed as unemployment fell, but growth is slowing. Meanwhile, wage growth is meagre, which creates a worrying economic disconnect.

“Rising nominal wages [is] needed to offset [the] expected fall in employment growth for aggregate spending to be maintained,” Turner said, noting that such a change ultimately needs higher productivity.

“At the aggregate level, this is reinforced by rapidly disappearing labour slack, meaning total household incomes cannot be boosted much more by rising employment, a key factor in the mid-2010s.”

At its simplest, Turner is effectively arguing that the number of people in employed in the UK is pretty much at a peak, meaning it will now struggle to create meaningful growth through simply adding more workers. Instead, it will need to improve productivity and output per person. There is currently little evidence of this materialising.

A key engine of growth is consumer spending. With low productivity persisting, and wage growth only increasing slowly, it is possible that household incomes could struggle going forward. This would likely be a major downside for UK growth as a whole.

Brexit will continue to dominate the economic story in the coming months, with forecasts of weaker growth once a deal is secured, or a major slowdown in the event of a no deal Brexit. But Macquarie’s analysis reminds us that there’s more going on in the economy than just the UK’s exit from the EU.

Source: Business Insider UK

5 ways life could become harder for British people if there is a no-deal Brexit

September 15, 2018
  • The latest tranche of no-deal Brexit papers have been released by the UK government.
  • They reveal that mobile phone calls in Europe could become more expensive.
  • International driving permits would be required to drive to Europe.
  • Britain would fall out of space surveillance programmes.

LONDON — The UK government on Thursday released the latest set of papers today warning UK citizens about what to expect if the government fails to negotiate a Brexit deal with the EU.

They cover everything from trade, to broadcast rules, to driving licences and add to previous releases which suggest a no-deal Brexit could also hit pensions, credit card payments and food imports.

Here’s everything you need to know about what more to expect if Britain crashes out of the EU without a deal.

Using your phone in Europe could become more expensive

man with mobile phoneShutterstock

Any UK citizen visiting Europe currently benefits from an EU directive which bars roaming charges on mobile phones. This means you’re not hit with a big bill while you’re away, just for making a few calls, sending a few texts or checking your social media accounts.

However, if Britain crashes out without a deal then that could all come to an end.

“In the unlikely event that we leave the EU without a deal, the costs that EU mobile operators would be able to charge UK operators for providing roaming services would no longer be regulated after March 2019,” today’s papers state.

“This would mean that surcharge-free roaming when you travel to the EU could no longer be guaranteed.”

Ministers insist that they would cap any new charges and mobile operators also insist they have no current plans to reimpose them. However, leaving the EU without a deal means this cannot be absolutely guaranteed for UK citizens.

Driving to the continent would become more difficult if no deal Brexit

calais driversGetty

If Britain leaves without a deal then UK driving licenses will no longer be accepted means to drive within EU countries. The government warns that in a no-deal scenario UK drivers would instead have to apply for an International Driving Permit (IDP) in the same way they do already to travel in many non-EU countries. Failure to do so would mean you could be in breach of EU law, with any travel insurance potentially invalidated too.

Medicines would become more expensive

prescription-pills-medicine-in-handperfectlab/Shutterstock

A no-deal Brexit scenario would mean Britain falling out of EU agreements on the import and export of medicines. This would mean that the UK would have to apply for individual licenses (costing around £24 a go) to import drugs. This would hit both consumers and the NHS hard and lead to potential shortages of key medicines.

Related: Chancellor says no deal Brexit will damage UK GDP for years to come

Gun smuggling could become easier

gunsAbout 2 million guns were reported stolen in the last decade. Elaine Thompson/AP

If Britain leaves without a deal then European Firearm Permits (EFPs) will no longer be recognised by the UK. Critics suggest this means there would need to be extra physical checks at the Irish border.

“This looks dangerous. The government hasn’t figured out how to sort out the Irish border, but now we’re being told that we’ll no longer be able to keep tabs on which EU citizens with guns,” Liberal Democrat MP and Best for Britain campaigner Layla Moran said in a statement.

“The Irish border will become the doorway to people wanting to bring guns into the country. This is no joke. We need a people’s vote with the option to stay in the EU and stop this madness.”

However, today’s government papers insis this would not weaken gun controls as “the police would continue to assess an applicant’s fitness to hold a firearm as part of their consideration of the Visitor’s Permit application.”

The UK could be the last to hear about an asteroid strike

dawn mission asteroid belt ceres dwarf planet ion thruster engine illustration nasa PIA18922_hiresNASA/JPL-Caltech

Leaving the EU without a deal means that Britain would fall out of the UK space surveillance programme. This means that it would no longer receive “space, surveillance and tracking data” from the EU and would be entirely reliant on info from the US.

Source: Business Insider UK