A short extension to Article 50 means firms that had hoped to cancel their costly no-deal plans must now remake them
1536 Anne Boleyn, the second wife of Henry VIII, prepared to die. Her execution at the Tower of London was due at 9am. But the swordsman was delayed, until at last the queen was told she would not die until the next day. It was “not that she desired death,” wrote a chronicler at the time, “but thought herself prepared to die and feared that delay would weaken her.”
Companies braced for a no-deal Brexit may empathise. Those with contingency plans for March 29th surely feel relieved that the government is trying to extend the Article 50 talks. Nine in ten firms prefer an extension to crashing out, according to the Confederation of British Industrya lobby group. Yet the prospect of a short delay, with no new plan for how to agree on a deal, merely moves the cliff edge back. Firms that had hoped to cancel their costly no-deal plans must now remake them.
Some companies are relaxed about a delay. Majestic Wine said in November that it would stockpile £5m-8m of European booze to safeguard against any snagging at ports. “This position has not changed,” it says. But not everything ages as well as wine. Britain’s refrigerated warehouse space ran out six months ago; those firms that booked space in April may soon be scrambling to see if they can rebook it in July.
Many of the firms that have stockpiled have done so on credit. Borrowing by manufacturers is rising at 20% a year, compared with 5% among non-financial firms as a whole. The longer the uncertainty goes on, the longer these loans must be serviced. Meanwhile, capital spending will continue to be deferred. No wonder thesection of the print edition under the headline
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