Trade talks between the EU and U.K. have struggled in recent weeks, increasing the prospect that Britain departs the bloc without a deal and that businesses face an extreme shock when the divorce takes effect.
It’s a scenario that would deepen the economic pain inflicted by the coronavirus pandemic, with companies already reeling from the damage of the national lockdown and the economy heading for its deepest recession in centuries. Unemployment has surged and Prime Minister Boris Johnson is caught between trying to revive businesses while avoiding a deadly second spike of the disease.
All the while, negotiations with the EU for a comprehensive economic agreement to replace the U.K.’s decades-long membership of the bloc have stalled badly, with both sides unwilling to budge on fundamental issues. The stand off pushes both parties toward a no-deal Brexit that would create a serious strain for companies.
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