UK prime minister Boris Johnson has ordered ministers and officials in his new government to "turbo-charge" preparations for a no-deal Brexit, unnerving currency markets and businesses — and leaving EU leaders wondering if he's bluffing.
The new prime minister's pledge to leave the EU with or without a deal on October 31 means both sides stand perilously close to a cliff-edge, peering down at the prospect of medicine shortages, flight disruptions and endless border queues.
To underline the UK's shift in tone, chancellor Sajid Javid will this week announce a further £1 billion ($1.8b) for no-deal planning — on top of the £4.2b set aside for all Brexit funding by the government so far.
The European Commission insists it will not be doing any more contingency planning to deal with the fallout before October 31 — a move designed to avoid giving Brexiters a "soft" hard landing.
Should the UK crash out in three months' time, EU officials calculate a chaotic exit would bring UK negotiators back to Brussels from November 1 to try and secure some continuity for businesses.
Here the FT considers where the biggest impacts from a no-deal Brexit could be felt:
Vast volumes of personal digital data from EU and UK citizens are transferred by businesses and public sector bodies across the English Channel every day.
Under no-deal, the legality of these data flows will be under question, having an impact on businesses including tech groups, healthcare companies or any services that deal with EU customers.
The disruption to data flows would be a significant barrier to trade and in the worst cases could force British companies to halt their European operations.
A system of contractual clauses offered by Brussels, allowing non-EU companies to carry out data transfers in compliance with European law, could offer a fallback.
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Large businesses with big legal departments who have anticipated a crash exit may well have already signed up to such alternative measures. But the CBI, the UK employers' group, has warned small and-medium sized enterprises have little awareness of what a hard Brexit means for them and the contingencies available.
In the longer term, the UK says it wants to sign an agreement on data-flows with the EU that would effectively treat Britain as if it was still a member state. There are a handful of these "adequacy" arrangements between the EU and third countries, but Brussels officials have warned it could take "years" for it to be concluded.
VERDICT: Both the UK and the EU face equal damage.
After a no-deal Brexit, the UK's lucrative financial services sector would lose "passporting" rights that allow British-based firms to operate in the EU's single market.
The prospect of mass disruption of the market after a hard Brexit means financial services is one of the few areas where regulators like the European Central Bank and Bank of England have been co-operating on risk before Britain's expected exit.
While firms have been left with most of the burden of preparing for no-deal, Brussels has taken important contingency steps.
These include temporary access to clearing houses operating in the UK that will end in March 2020, 18 months for central securities depositories that settle trades, and a six-month window to allow contractual changes to over-the-counter derivatives.
Financial services groups also face thornier logistical issues on exit day itself. October 31 falls on a Thursday, which means UK firms would face the difficult logistical exercise of switching the systems they use to report transactions midweek — although many EU countries enjoy a public holiday on November 1.
In the longer term, with or without a divorce deal the City of London will be striving to gain limited market access rights under an EU system known as "equivalence" after Brexit. This is granted to non-EU firms if the European Commission decides that the country's financial regulations are just as tough as Brussels'.
But even if agreed, the financial sector will not enjoy the depth of market access it enjoyed while the UK was a member state — and equivalence can be withdrawn by the commission at short notice.
VERDICT: A key part of UK economy faces significant disruption.
Britain would fall out of the EU's customs union under a no-deal Brexit, meaning UK companies would have to fill in customs declarations, change labels on food products and get health checks for exports containing animal products.
A UK communications campaign has been launched to inform companies about what they need to do to prepare.
But British businesses have criticised the government over a lack of information on how to prepare for the cliff-edge, for example on issues such as dealing with new tariff changes or how customs checks would function on the Irish border. There is currently an "invisible" frontier between north and south, but a no-deal exit would be likely to mean border infrastructure returning to the island.
Sam Lowe, senior research fellow at the Centre for European Reform, said companies had failed to prepare because they didn't believe a crash exit was realistic.
Number of UK based small and medium enterprises that trade internationally and have no contingency plans for Brexit.
"So far the whole strategy required companies to sign up to things and engage, but they haven't been doing it enough," he added.
Many businesses, for example, have failed to sign up for "exporter numbers" that allow companies to continue importing and exporting after Brexit.
Earlier this year, the UK government wrote to 145,000 companies that trade with the EU to get them to sign up for a system that would allow them to simplify customs declarations and delay import duty payments. According to Robert Hardy, a customs expert from logistics firm Oakland Invicta, only about 10,000 companies have applied.
On the EU side, Brussels has kept its customs contingency measures deliberately sparse.
The commission has passed legislation allowing time adjustments on customs declarations, but provides no special waivers for Britain's busy roll-on roll-off ports, which are among the most widely used and cheapest methods of transporting goods between the UK and EU.
Member states at the frontline of the EU's new trading borders, like the Netherlands, Belgium and France, have been recruiting trained customs officials to deal with the additional red tape.
VERDICT: The UK is likely to be disproportionately hit by disruption.
While the transport sector has always been hopeful of a deal, those operating across borders, such as airlines and Getlink — the Eurotunnel operator — have prepared for a no-deal scenario to minimise disruption.
Airlines will be able to continue operations but it will not be business as usual. The commission has passed two legal acts allowing airlines to fly point-to-point between UK and European cities. These basic flying rights, which will be matched by the UK, last until March 2020. But flight operators will not be able to fly on to other EU destinations, or take new passengers to a non-UK destination.
The six-month measures provide a short window for the EU and UK to negotiate a future air deal but new arrangements are unclear.
Airlines such as Ryanair, EasyJet and IAG — British Airways' parent company — also need to meet the EU's airline ownership and control rules, which require majority ownership by EU nationals.
Getlink's Eurotunnel services — which transport 20 million passengers, 2.6 million cars and 1.6 million trucks each year between the UK and continental Europe — will also continue to run. Getlink spent €15 million ($25.3m), in advance of the first no-deal Brexit date of 29 March, for the installation of new infrastructure.
Eurostar expects to maintain its train services, saying it worked closely with France and Belgium to avoid disruption and made arrangements to ensure the necessary operating licenses, safety certifications and driver registrations are in place.
UK truckers — the lifeblood of goods trade with the EU — will be granted temporary haulage rights to ensure "basic connectivity" to help minimise disruption and queues at ports like Calais. The measures will stay in place until the end of 2019 but restrict UK lorries to limited deliveries in the EU.
VERDICT: Both sides will face temporary disruption.
After a no-deal Brexit, the UK will fall out of the union's common fisheries policy, meaning EU vessels will no longer be granted access to British fishing waters.
Since vessels from other EU members catch far more fish in UK waters than British fishermen take from theirs, fisheries is one of the few areas where the EU could bear the brunt of no-deal.
The EU estimates that activity worth €585m is carried out by European vessels in British waters, with Belgian fleets dependent on the UK for 50 per cent of their entire landings.
However, few parts of the UK economy are more vulnerable to border disruption than the UK's seafood export sector, which relies on rapid delivery to ensure its products are fresh when they reach European markets.
More than £1.3b of the nearly £1.89b in total UK seafood exports in 2017 went to the EU — £727m to France and Spain alone.
Many UK fishermen hope to benefit from the new limits EU vessels would face in UK waters. However, the UK fleet would not have capacity to immediately take advantage and any such reallocation would certainly be fiercely contested in future trade deal negotiations.
Under its minimal contingency planning, the European Commission has passed emergency laws that would allow EU fishermen to get compensation "in the event of a sudden closure of UK waters to EU fishing vessels". Brussels has also said the EU will give UK fisherman access to EU waters until the end of 2019 if the rights are reciprocated.
VERDICT: EU stands to lose more than UK.
- Additional reporting from Cat Rutter Pooley and Mure Dickie.
Written by: Mehreen Khan, Jim Pickard and Janina Conboye
© Financial Times