Businesses aren’t ready for no-deal Brexit: UK watchdog

Bloomberg

The UK will introduce mandatory checks on trucks to ensure they’re ready to cross the border in the event of a no-deal Brexit as a majority of businesses remain unprepared, the public spending watchdog said.
The border will be “less than optimal” under a no-deal exit, meaning delays for businesses and the public, the National Audit Office (NAO) said in a report on Brexit preparedness. In a worst case, the flow of goods through the channel crossings could be cut by 45%-65%, and take up to 12 months to return to normal, the NAO said, citing government estimates.
UK Prime Minister Boris Johnson has pledged to lead the country out of the European Union on October 31, with or without an agreement to soften the impact. On Wednesday, British and EU officials were pessimistic about the chances of securing a deal as Johnson’s Northern Irish allies resisted plans drawn up in talks in Brussels.
Under a no-deal Brexit, the government will divert trucks lacking the appropriate documentation to clear French customs at the approaches to the ferry port at Dover and the channel tunnel to limit tailbacks, the report said. It would also build temporary arrangements to manage crossings between Northern Ireland and the Republic of Ireland, but says that these are not likely to be sustainable.
The watchdog said that only 5% to 20% of small- to medium-sized enterprises are prepared for French customs.

Brexit talks bring hope to British inflation market
Bloomberg

Brexit risks have distorted the outlook for UK inflation ever since the 2016 Brexit referendum. The market may be about to discover by exactly how much.
Betting on lower inflation expectations has been a painful trade for investors in recent years. The persistent high level, given a no-deal exit from the EU would lead to a pound slump and a spike in prices, appears in contrast to the UK’s sagging economy.
Now, optimism in recent days for a Brexit agreement means short positions are finally starting to work out.
A Brexit deal or no Brexit will see a full unwind of the net short currency positioning (which may see the pound rally by more than 5%), reducing the risk of higher inflation from food shortages and tariffs, to the benefit of short inflation positions.