The Bank of England governor has told lenders to be ready for the possibility that the UK and EU fail to agree a free trade deal by the end of the year.
On a call with financial firms, Andrew Bailey stressed the importance of ensuring the financial system could cope with a no-deal, Sky News reported.
The Bank said the reminder was part of its regular weekly call with lenders.
It comes as the UK and EU continue to negotiate over their future trading relationship, in a fourth set of talks.
However, key sticking points remain. The UK left the EU in January but is covered by a transition period until the end of this year. The UK has consistently said it will not ask for a longer transition period.
The Bank of England said Mr Bailey «meets the leadership of UK banks on a very regular basis».
«As we have said previously, the possibility that negotiations between the UK and EU over a future trading relationship might not conclude in a deal is one of a number of outcomes that UK banks need to prepare for over the coming months,» the Bank said in a statement.
«It is fundamental to the Bank of England’s remit that it prepares the UK financial system for all risks that it might face,» it added.
Brexit resurfaces
The UK and EU sides still have key sticking points in negotiations that are taking place, the BBC’s Katya Adler told the Radio 4 Today programme this week.
She said that negotiations have faltered and been delayed due to the coronavirus pandemic, so time is tight, and that if there are clashes between the two sides, because the talks are taking place online there is less opportunity to walk around the block to try and reach a consensus.
Sticking points include common standards on the environment and labour markets and how disputes over those standards will be resolved, and access to fishing grounds.
Some of the fundamentals of a no-deal Brexit have remained the same.
Similarly, the Bank of England has warned about the negative economic effects of a no-deal Brexit for a number of years.
The Bank has done stress tests looking at the effect of a «disorderly» Brexit on the banking system, and in 2018 said that major UK banks have enough capitalisation to withstand the shock of a no-deal Brexit.
In short, the UK banking system would be strong enough to deal with it.
In March, as the effects of the coronavirus crisis began to bite, the Bank said that due to «extensive preparations» by authorities and the private sector, if there was a no-deal Brexit, most risks to cross-border financial trade had been mitigated.
HR professional Angela Russell and her partner Steve have decided that despite coronavirus, they will be flying to Montenegro on 5 July.
They’re only going for a week’s holiday, but the prospect of having to spend two weeks in quarantine on their return doesn’t bother them.
«I have become totally fed up with all the bad news and how the government is dealing with issues,» she told the BBC.
«I’m prepared to put up with quarantine just to get away from here for a bit.»
The couple will be holidaying with a friend of Angela’s who has terminal cancer, accompanied by her husband. «She had planned to do a lot of travelling this year and until now, all her plans have been kiboshed.»
The four have booked to fly with Jet2, which plans to resume its flight programme on 1 July.
Return to the skies?
A number of other airlines and tour operators have announced similar plans.
Ryanair and Tui are also due to restart services from the beginning of July, while EasyJet is taking to the skies again from 15 June.
British Airways has said it will launch «a meaningful return to service» in July, while Virgin Atlantic has said flights will not resume until August.
However, at the moment, the UK Foreign and Commonwealth Office (FCO) is still advising against all non-essential foreign travel, with no indication of when the policy might change.
A spokesperson for Jet2 said the firm always followed FCO guidelines and was «reviewing the situation on a daily basis».
Jet2 declined to give any details of the level of bookings over the next few months, describing it as «commercially sensitive information». The BBC has approached other airlines and holiday firms for comment.
One airline that does seem to be confident about the future is budget carrier Wizz Air, which said on Wednesday that it was still planning to take delivery of new aircraft.
«Whatever we can fly, we’re going to be flying, because we’ve seen that there is actually demand out there,» said the airline’s chief executive, Jozsef Varadi.
Pragmatic approach
Angela, who live in Wales, is semi-retired and now works just one day a week, which she can easily do from home if forced to self-isolate. She points out that Montenegro is «pretty much coronavirus-free» .
«I’ve spent my life assessing risk, either in work or in my daily life,» she says. «The only risk is that we might pick it up at the airport.»
She adds: «My fear is that Montenegro will say, ‘We don’t want to let people in from the UK, because you don’t seem to manage it very well.’
«But I feel it’s imperative now that we support the travel industry. We have to take a pragmatic approach to how we do things.»
Insurance fears
Another hopeful holidaymaker is Robert Jenkins, of Bedwas in south Wales, who usually goes abroad four or five times a year with his wife Barbara. «We’re retired and travelling is very important to us,» he told the BBC.
Image copyrightRobert JenkinsImage caption Robert Jenkins hopes to fly to Greece later this year
Robert and Barbara are hedging their bets, with not one, but two trips booked between now and the end of the year.
The couple are due to fly with EasyJet to Malaga in Spain on 1 July and to the Greek island of Kos on 12 September.
But Robert says he is poised to cancel the Spanish trip, because «the FCO still hasn’t given the go-ahead and I don’t know if I’ll be insured».
«I’m really hoping Greece will go ahead. We’ve gone to the same resort for 20 years and we are on first-name terms with the people in the village we stay at,» he says.
«But it’s all up in the air. Things are changing day by day.»
Anyone considering booking an overseas holiday needs to find their balance on a financial tightrope.
As always, if you book on a flight which is subsequently cancelled, you should be refunded, although millions of people have already found that can be a slow, and still unresolved process.
Booking a package holiday also offers financial protection if it is later cancelled owing to a second wave of the virus or current restrictions being extended.
Insurance is more complex. Travelling against Foreign Office advice, which is still that anything but essential travel should be avoided, would invalidate existing insurance. That has implications for claiming the cost of accommodation, car hire and so on, but also medical care.
We still do not know when that advice will be lifted. It is under review.
Those buying a new insurance policy – irrespective of the travel advice – will often find that it will not cover you for coronavirus-related issues, such as having to cancel a break because you have been told to self-isolate.
Budget hotel business Travelodge is to propose a new restructuring plan that it hopes will end a row with landlords and protect thousands of jobs.
The company wants landlords to agree £144m of temporary rent cuts on its 564 sites in return for fresh investment.
Travelodge, whose backers include Goldman Sachs, has refused to pay rent in the three months to end-March.
But landlords accuse the hotel chain of taking advantage of the virus pandemic to cut its debts at their expense.
Travelodge is due to file for a limited form of bankruptcy – a company voluntary arrangement – on Wednesday that would allow it to force through rent cuts if necessary.
However, the company is not planning hotel closures, and has said it will start paying full rent again from the end of next year.
Like most hotels, Travelodge has suffered amid the coronavirus lockdown as holidays, events and business trips are cancelled.
The company has come under fire from landlords, according to Sky News, which first reported the Company Voluntary Arrangement (CVA) deal.
New funding
Travelodge is arguing that it will lose £350m in sales due to the lockdown and that 10,000 jobs are at stake.
The company’s owners will use Travelodge’s £100m of reserves, £100m in new borrowings and £40m in fresh cash to prop up the firm.
The proposal will also include a share of profits above £200m, once business recovers.
But landlords will only receive a fraction of the rent they are owed until the end of next year. Some landlords have previously threatened to seize the hotels and run them themselves, the Daily Telegraph has reported.
Most are getting more than 50% of what they are owed, but for 37 lossmaking hotels they are paying no rent.
More than half of all payments were made by card last year – leaving the UK «inadvertently» prepared for the coronavirus lockdown, banks say.
It was the first time debit, credit and charge cards accounted for the majority of payments, as cash fell to fewer than one in four payments, UK Finance said.
The trade body said cash withdrawals had since fallen sharply amid lockdown.
It has yet to make long-term forecasts on whether the way we pay for things will change long-term.
Campaigners and banks say cash will continue to be an option for consumers for many years.
Paying in the pub
Withdrawals at ATMs fell by two-thirds in the early weeks of the crisis before levelling out at half of normal levels.
People are buying online and, when they do go to the shops and supermarkets, they are being encouraged not to use notes and coins. The Wetherspoon pub chain, for example, has suggested customers should pay by app or by card at the bar when its doors reopen, and others could follow suit.
Previously UK Finance has said cash would be used in fewer than one in 10 transactions within a decade, but it was unclear as yet whether that prediction may accelerate as a result of changing consumer trends following the virus crisis.
Its research showed that, out of 40 billion payments made last year, about 30 billion were «spontaneous» day-to-day transactions by consumers. Overall, cards were used in 51% of transactions.
The figures showed:
The number of contactless payments rose by 16% last year, often in supermarkets. A new limit of £45, rising from £30, has since been rushed through during the coronavirus crisis
Some 23% of all payments were made by cash last year, down from 58% a decade earlier
Last year, 7.4 million primarily younger people lived close to a cashless lifestyle, but 2.1 million people, often older, mainly used cash day-to-day
Some nine in 10 people had experience of shopping online, including eight in 10 older people, so a total of 48 million people bought goods and services over the internet last year.
For the first time, by the start of this year, half of the population was using mobile phones to do their banking, while 72% used online banking in some way, the research found.
Stephen Jones, chief executive of UK Finance, said the research showed many consumers had been «inadvertently» prepared for paying for things during lockdown.
«With consumers already using contactless payments and remote banking more than in previous years, these technological advances have allowed many people to shop and make payments safely from home or in store. The impact of Covid-19 may accelerate these habits for many customers,» he said.
Image copyrightNigel WebbImage caption Some shops feel they need to make clear they still accept cash
Cash remained the second most popular way to pay last year, with the use of cheques still falling.
Mr Jones said banks were still making cash available to anyone who needed it.
Natalie Ceeney, who authored a report about the risks of moving too fast to a cashless society, said: «It’s essential that we ensure that everyone is included in our economy, and until digital payments work for everyone, we need to maintain people’s ability to access and pay with cash.»
John Howells, chief executive of Link – which oversees the UK’s cash machine network, said: «There is still almost £1.5bn being withdrawn from ATMs a week and millions of people aren’t yet ready to go cashless. What’s needed now is legislation to maintain cash for as long as it is needed.»
La Cámara de Comercio, Industrias y Agricultura de Panamá (CCIAP) señala que el Gobierno debe cumplir con el pago a proveedores y destacaron que llevarán el tema ante el equipo económico del Estado para que se dé la agilización de estas responsabilidades, ya que es importante para la reactivación del país.
El Sindicato del Cuerpo de Bomberos de Panamá exigió este martes 2 de junio, la renuncia del director encargado de la entidad, Coronel Gabriel Isaza, por supuesta incapacidad administrativa, ante la falta de insumos para mitigar el contagio del coronavirus y la falta de mantenimiento de estaciones.
