This content is not available in your region

Euler Hermes sees 70 percent chance of Brexit deal at last minute

Access to the comments Comments
Text size Aa Aa

BERLIN (Reuters) – There is around a 70 percent chance that Britain and the European Union will reach a Brexit deal at the last minute, credit agency Euler Hermes said on Thursday.

“For companies that would be like a ‘blind date’ because they wouldn’t know what they’ve got coming,” Ludovic Subran, chief economist at Euler Hermes, said.

“The details could contain good or bad surprises but for companies it would still be better than an ugly divorce,” he added.

If a Brexit deal were reached, the exchange rate between the British pound and the euro would probably climb to 1.14 after an expected trough of between 1.06 and 1.09 by the end of 2018, Euler Hermes said.

It said it saw a 25 percent likelihood of Britain quitting the bloc without a deal and said this would result in customs of around 4 to 5 percent for both Britain and the EU as well as a big depreciation in pound sterling – probably to 0.88 euros by the end of 2019.

That would cause a drop in exports, it said.

Euler Hermes said uncertainty due to Brexit was likely to shave up to 0.1 percentage points off British economic growth every quarter until an agreement was reached.

It said it was seeing signs of British companies increasingly hoarding imported goods that were indispensable for their production so they could avoid possible customs and delays or disruptions to their supply chains.

It said a hard Brexit – generally understood to mean Britain distancing itself from the EU by leaving the single market and the customs union – would have a huge economic impact, hurting Britain the most while exports from Germany, the Netherlands, France and Belgium would also suffer.

There is a 5 percent chance of Britain remaining in the EU, Euler Hermes said.

(Reporting by Michelle Martin; Editing by Joseph Nasr and Maria Sheahan)

euronews provides breaking news articles from reuters as a service to its readers, but does not edit the articles it publishes. Articles appear on for a limited time.