Fitch: No-deal Brexit disruption would affect some UK issuers

"The automotive, aerospace, retail, real estate and airline sectors are all exposed to a "no-deal" Brexit," Fitch Ratings said in a recently published report and added: 

"The risk to individual issuers varies with their size, diversification and financial strength. Among financial institutions, medium-sized and specialist lenders are more exposed than major UK banks."

Key quotes

  • Recent comments by EU and UK negotiators suggest that a withdrawal agreement is taking shape, but a no-deal outcome remains possible.
  • UK banks are well-positioned from a funding and liquidity perspective and may only face challenges if wholesale markets are disrupted for a lengthy period. 
  • UK retailers (particularly non-food) are already under pressure from online shopping and subdued consumer confidence.
    • A no-deal Brexit could add to these pressures as import duties, sterling weakness and potential staff shortages push up costs.
  • A no-deal exit from the EU could put pressure on tenants of commercial property companies, particularly in London offices.

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