All the UK's major banks would be able to cope comfortably if the nation abruptly leaves the European Union next year in a 'disorderly' Brexit, according to an assessment by the Bank of England.But Mark Carney, the bank's governor, has warned that fewer than half of businesses have contingency plans in place should there be a no-deal Brexit under a 'worst case scenario'.

Banks are prepared for all Brexit scenarios

The UK's central bank subjected the nation's seven major lenders - Royal Bank of Scotland, HSBC, Barclays, Lloyds, Standard Chartered, Santander and Nationwide Building Society - to a stress test two and half times more severe than the worst Brexit scenario. All seven passed the test.Stephen Jones, chief executive of industry body UK Finance, said: “The UK banking system has significantly enhanced its financial resilience over the past decade. The stress test results demonstrate that UK banks have strengthened their financial position and have the capacity to continue supporting the real economy in the event of a severe economic shock.“However, a no-deal Brexit would have a devastating impact on the broader economy which is why the finance industry’s priority is to ensure a managed exit from the EU, minimising disruption and additional costs for the customers and businesses we serve.”

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Follow the link for official communication explaining the UK Government's Brexit Deal.

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No-deal recession warning

The Bank of England's analysis, which was published on Wednesday evening, found that a no-deal Brexit could trigger a recession worse than the financial crisis a decade ago, immediately shrinking the economy by eight per cent, sending unemployment soaring, devaluing house prices by a third and spurring a run on the pound.But Mr Carney emphasised that the analysis was based on a worst-case scenario, which the bank did not expect to happen. However, he added: "We have a responsibility to have systems ready for whatever happens."And while the banking system might be able to withstand a no-deal Brexit, Mr Carney told BBC Radio 4's Today programme on Thursday: "We know from our contacts with business that less than half of the business in the county have initiated their contingency plans for a no-deal Brexit."All the industries, all the infrastructure of the country, are they all ready at this point in time? As far as we can tell, the answer is no."Mr Carney also said that, while he had no preference on what sort of Brexit deal was agreed, he did want to see a transition period agreed. "From a financial system perspective, something in the 18 to 24 months is sufficient," he said.

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• Study finds lack of HR planning in workforce upskilling
• Crown World Mobility asked: How does Europe feel about Brexit?
• Treasury forecasts economic damage likely from Brexit

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May and EU continue to push their deal

Giving evidence before a House of Commons committee on Thursday, Prime Minister Theresa May reiterated her determination to get the withdrawal deal agreed with the EU through parliament in a vote scheduled for December 11.Only if it were voted down would the government step up planning for a no-deal Brexit."This is an important point in our history. It is a vote on which we will be deciding whether we deliver on the decision of the British people," she told the Commons liaison committee."What has been made clear from the European Union is that this is the deal that has been negotiated and this is the deal that people need to focus on when they are looking at the vote."Meanwhile, Michel Barnier, the EU's chief Brexit negotiator, has told the European Parliament that Mrs May's Brexit plan "is the only possible deal". He added, "We are not at the end of the process, which is going to go on being difficult."He said he would "respect" the democratic debate in the UK, adding that British MPs would be considering a text "where the future of their country is at stake".

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Visit our Brexit pages for all the latest Brexit news.

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