No-deal Brexit could prompt a fit of profit warnings, say accountants
Bailing out of the EU in a disorderly manner could lead to a ‘flurry of profit warnings’ from public UK companies, according to ICAEW members at a Brexit select committee meeting told British lawmakers.
A no-deal Brexit on October 31 could see a ‘flurry of profit warnings’ from public businesses in November, British lawmakers were told.
The Institute for Chartered Accountants for England and Wales (ICAEW) warned MPs that bailing out of the bloc without a deal poses a ‘systemic’ impact on investor confidence in the UK economy.
‘I would like to have this on record, it is likely we may well see after November 1 a flurry of profit warnings from companies finding themselves in completely unprecedented circumstances,’ Regional Director for Europe at the ICAEW Martin Manuzi told members of the the Brexit select committee.
No-deal Brexit could have ‘massive macroeconomic impacts’
The ICAEW has more than 150,000 represents more than 150,000 accountants across England and Wales, including the Big Four – PwC, KPMG, Deloitte and EY – which audit for many of the UK’s largest companies.
Manuzi said that any ‘dislocation’ in the market caused by a disorderly Brexit would force public companies to notify shareholders, which could negatively impact the value of their respective stocks.
‘Things that we ask ourselves? What is the cumulative effect on market confidence of the issuing of such profit warnings, and a systemic lack of confidence can have massive macroeconomic impacts,’ he told MPs during the hearing.
Start-up investment in decline due to Brexit
British lawmakers on the Brexit committee also heard how Brexit was responsible for a decline in investment in start-ups and hurting its reputation as a major technology hub among investors.
In fact, venture capital investment in the UK has fallen by ‘about 58% in terms of the deals done’ with Germany close to overtaking Britain as the leading tech hub in Europe, according to Giles Derrington, Head of Brexit policy at techUK.
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