UK companies would cope with 'hard Brexit', says Fitch boss

British companies across all sectors will remain resilient after the country leaves the European Union, even if the UK heads for a “hard Brexit”, according to Fitch.

Officials at the rating agency said businesses would cope even if Britain did not secure a transition deal with Brussels and fell back on World Trade Organisation (WTO) rules for trade with its former EU partners.

“We’ve not seen any sector where Brexit will be the bogeyman that causes everything to fall over,” said Alex Griffiths, a group credit officer at Fitch.

However, Mr Griffiths warned that it was important to resolve uncertainty surrounding the UK’s trading relationships as quickly as possible.

“A long period of uncertainty will be very bad for corporates,” he said. “As soon as you look at trade, and global supply chains, for these companies there is going to be a big impact if we have a hard Brexit will tariffs going up. There will be a lot of shuffling around to do, but ultimately the companies will cope.

“It’s pressure. But it’s not companies falling over rapidly.”

Retailers are expected to come under pressure from the weaker pound, which has pushed up import costs, as well as ongoing competition on the high street, Mr Griffiths said.

Fitch also warned that it could strip the US of its prized top rating if Donald Trump embarks on a fiscal splurge.


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Ed Parker,  head of European sovereign ratings at Fitch, said rising debt levels and weak growth would lead to a “heavy flow” of credit rating downgrades this year, adding that a trade war triggered by the US president-elect presented one of the biggest risks to the global economy.

“Fiscal stimulus is back,” he said at a conference in London. “We do see increasing medium-term pressures (on the US credit rating). Even before elections the US had the highest level of government debt of any AAA country.

“If we add on top of that Trump’s plans to cut taxes by $6.2 trillion over the next 10 years, that could add around 33pc to US government debt [in 2016 terms],” he added.

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