Bank of England reminds banks of 'no deal' Brexit risk

  Bank of England is reminding British banks to prepare for possibility that U.K. and European Union will fail to agree on a tre deal by end of year, amid few signs of progress in discussions between two sides.

In a statement Wednesday following reports that its goverr, Andrew Bailey, is asking banks to step up ir preparations for a “-deal” scenario, Bank of England said it is “fundamental” that it prepares financial system for “all risks that it might face.”

“In performing that role, Goverr meets leership of U.K. banks on a very regular basis," it said.

"As we have said previously, possibility that negotiations between U.K. and EU over a future tring relationship might t conclude in a deal is one of a number of outcomes that U.K. banks need to prepare for over coming months.”

Though U.K. left EU's political institutions in January, it remains within its ecomic orbit — tariff-free single market and customs union — until end of year.

country has an option to extend this so-called transition period designed to smooth Brexit process, but Prime Minister Boris Johnson has insisted he won't be asking for a delay. Any request has to be me by July 1.

Discussions over a tre deal have me little heway, with both sides arguing that or is creating unnecessary obstacles. British government says EU is being unreasonable on fishing rights, for example, while EU counters that U.K. is trying to cherry-pick best parts of being a member of bloc.

And that's raised concerns that British ecomy faces prospect of a ‘ deal’ scenario at a time of acute stress related to coronavirus pandemic.

Japanese carmaker Nissan joined or businesses in expressing concerns, warning it will t be able to sustain operations at its plant in Sunderland, rast England, if negotiations fail to le to a tre deal.

Nissan’s global chief operating officer, Ashwani Gupta, told BBC that company wants to remain in U.K. but that business “will t be sustainable” if current tariff-free arrangement disappears.

“That’s what everybody has to understand," he said.

Ar round of Brexit talks is taking place via video conferencing and is expected to conclude Friday. Johnson is n expected to take part in a summit with EU leers this month.