SMEs advised to prepare staff for Brexit layoffs
Business group Isme is advising member companies in the frontline of a crash-out Brexit at Halloween to immediately prepare staff for potential redundancies.
The advice applies to companies which make their living exporting goods and services across the Irish Sea and who will most likely be buffeted by any further slump in the value of sterling against the euro.
Chief executive Neil McDonnell said obligations under employment law will require a range of small firms to start talking to staff about redundancies this week.
Small firms surviving on slender margins and in areas most likely to be hit by tariff hikes under any no-deal Brexit at the end of October should be consulting with staff immediately, said Mr McDonnell.
He said that the consultation period under employment law would bring any talks right up against the Halloween deadline. Opening consultations with staff this week would allow employees and business owners to discuss options such as part-time work to keep the most vulnerable firms from going under, said Mr McDonnell.
Business owners continue to anxiously monitor the currency markets after sterling slid on Wednesday when Prime Minister Boris Johnson suspended parliament for a number of days in September.
The manoeuvre is designed to outfox MPs who seek to kill his “do or die” pledge to get Britain out of the EU, even without a transition deal, on October 31.
Separately, business group Freight Transport Association Ireland which represents truckers who face huge delays and business challenges under a no-deal Brexit, has published a costs survival guide for the industry.
“With the possibility of the UK crashing out of the EU without an agreement in place becoming more likely every day, logistics businesses are facing a challenging road ahead,” said its head, Aidan Flynn.
The pound got some sort of reprieve in the latest session, to trade little changed at 90.74p, as markets focused on the drama that is expected to unfold in Westminster in the coming days and through next week.
“With only days to move against the government, the anti-no-deal caucus in parliament must strike fast, promising a busy week for sterling and UK assets,” said Chris Beauchamp, chief market analyst at online broker IG.
Traders are bracing for more big price swings in the pound between now and the expected October 31 Brexit date, with a volatility gauge hitting its highest level of 2019.
Three-month sterling implied volatility — a gauge measuring expected price swings in the pound between now and end-November — rocketed to its highest since December.
“This price action reflects concerns that the little time that remains for parliament to attempt to block a no-deal Brexit will now be even shorter,” said Lee Hardman, currency analyst at MUFG.
The pound’s decline has been relatively modest this week because most investors already thought a no-deal Brexit was the most likely outcome.
That was based on positioning data and derivatives pricing, analysts said.
Meanwhile, shares in AIB and Bank of Ireland, up by around 2%, also got a reprieve as global stock markets rallied.
