AMI: Hard Brexit could cost hundreds of thousands their jobs

Ryan Bembridge

October 22, 2018

The Bank of England could be underestimating the detrimental impact of a hard Brexit – which could trigger hundreds of thousands of British workers losing their jobs.

That was the warning from trade body the Association of Mortgage Intermediaries in its quarterly economic bulletin today.

AMI questioned the Bank of England’s prediction that GDP will increase by 1.75% on average in the next three years.

The trade body said: “Is this a triumph of hope over reason? We cannot see the tangibles to justify the Bank’s position…

“The UK still has huge liquidity risks at its heart. A hard Brexit or deal that falls short of certain crucial trade agreements could cause GDP to crash in the UK and result in hundreds of thousands of British workers losing their jobs.”

AMI raised concerns about unemployment in the Euro-area. This is sitting at 8.3% in June and has been over 15% in Spain since 2009. In the UK Santander and TSB Bank are Spanish owned, with the latter’s parent being Banco Sabadel.

Stronger economic growth in the US has prompted increasing expectations of a further five rate rises at the Federal Reserve; two 0.25% increases this year and three next year. Since the US is the UK’s second largest trading partner, this together with a rise in US government debt issuance could push up longer-term interest rates, AMI said. This would put additional pressure on funding costs for UK banks, further ramping up the risk of margin compression and subsequent changes to criteria.

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