UK auto makers, banks feeling pain of Brexit uncertainty
Lenders scramble to prevent catastrophe, while auto makers see investment plummet
As a City of London delegation heads to Brussels to try and avoid a post-Brexit crisis for UK banks, British car makers have already begun to feel the pain.
The Financial Times reports that UK-based lenders could face 15 billion euros of restructuring costs and as much as 40 billion euros of additional tier one capital requirements.
The City delegation is attempting strike a free trade deal on financial services, which has reportedly earned cautious support from some in Germany, with hopes to convince Spain and France to sign on.
The UK auto industry has already been hit by the effects of Brexit, with investment in the country’s car makers falling precipitously in the first half of this year, and could be see full-year investment totaling only one-quarter of what was invested two years ago.
“It’s very difficult to cost investment if you don’t know what your output price is going to be,” Mike Hawes, chief executive of the SMMT, was quoted by the FT as saying. “The industry wants a lot more certainty.”