Business

WASHINGTON — Covid-19 has come roaring back and is likely to inflict further damage on the American economy, which will take years to recover to its robust pre-pandemic status.

And even with promising news on a successful vaccine candidate, that is unlikely to be widely distributed for many months.

US coronavirus infections have hit new record levels of more than 150,000 a day, causing authorities in many areas to impose new restrictions.

"COVID still determines the course of the economy," economist Diane Swonk of Grant Thornton, said in an analysis.

"The current surge in cases is much more worrisome... [and] it is expected to be more disruptive to economic activity," she said.

Authorities say an increasing number of cases have been traced back to relatively small private gatherings.

"Buy a small turkey," Swonk urged for the coming Thanksgiving holiday, when Americans traditionally gather with extended family.

"Delay celebrations and demand our elected officials do more for those suffering through no fault of their own. Masks are disposable; people are not."

Chicago, the nation's third most populous city, has called on its residents to stay at home, while in New York and Minnesota, establishments selling alcohol must close at 10:00 pm.

The world's largest economy over the summer showed promising signs of recovering from the worst recession since the Great Depression, but now risks another reversal especially in the absence of a new stimulus package from Congress.

"We are starting to hear from economists that they are thinking about lowering their GDP projections because of Covid," said Maris Ogg of Tower Bridge Advisers.

While booming home and auto sales have been a bright spot in the economy, along with a rebound in manufacturing, consumers are worried about the upsurge in cases. One measure of consumer sentiment plunged in November for the first time since July.

Not until 2023?

The new wave of infections comes in the midst of a combative political transition: Joe Biden won the November 3 election, blocking President Donald Trump's bid for a second term, though Trump continues to dispute the results.

Democrats retained their majority in the House of Representatives, but whether the party can wrest control of the Senate from Republicans will not be known until early January.

That uncertainty has scuppered hopes for rapid approval of a massive new aid package to support suffering families and businesses, as well as budget-constrained state and local governments.

Congress in March approved multiple spending bills to respond to the pandemic, which were credited with boosting the economy, but many of the provisions of the $2.2 trillion CARES Act have expired.

With at least 11 million US workers still unemployed, Republicans and Democrats remain divided on the structure and size of the next package.

Swonk said even a "skinny" $1 trillion stimulus could bring activity back to its pre-crisis levels by mid-2021.

But, she warned, "Employment would not reach its previous peak until late 2023. A vaccine can't come quick enough to feed hungry families."

Federal Reserve Vice Chair Randal Quarles said on Tuesday he does not expect the economy to recover until 2022 or early 2023.

Consumers need to regain confidence in order to return to normal spending patterns, such as going to the movies, eating out or going on vacation.

In the nation's capital Washington DC, for example, only 10 percent of workers returned to their jobs in October, according to data from the DowntownDC Business Improvement District.

The city's daytime population fell to 47,000, from 256,000 before the pandemic.

Unequal recovery

Many observers fear the economic recovery will not follow the usual pattern, with a quick V-shaped rebound, or even a slower U-shape. Instead it could see a two-speed K-shaped recovery that leaves many people behind.

The US unemployment rate fell to 6.9 per cent in October, down from the peak of 14.7 per cent.

But a third of the jobless have now been out of work for more than six months.

This worries economists, because the longer people remain on the sidelines, the harder it is to find a job.

Central Bank chief Jerome Powell said in many cases it has been women who were forced out of the workforce "not by choice," while children are not getting the education they should receive.

"We're not going back to the same economy," Powell said.

The new economy will be more dependent on technology, he added.

"I worry that it's going to make it even more difficult than it was for many workers," especially lower-income service workers who are more likely to be women and minorities, he said.

LONDON — Most stock markets in the US and Europe ended the week on an upbeat note on Friday as coronavirus vaccine hopes outweighed worries over spiking infections in Europe and the United States, dealers said.

Asian bourses, however, took a hit as traders feared that another wave of Covid-19 lockdown measures will throw a shaky economic recovery off course.

In New York, the Dow Jones index had added 0.8 per cent in midday trades while most European markets were slightly higher at the close of business.

London bucked the trend with the FTSE 100 index off by 0.4 per cent on the back of a stronger pound, which hits share prices of multinational companies that earn vast sums in dollars.

Sterling climbed on growing EU trade deal hopes after reports that British Prime Minister Boris Johnson's top advisor and Brexit mastermind Dominic Cummings will leave later this year.

That development "has raised speculation that the balance has tilted a little towards in favour of a deal than no deal," suggested Fawad Razaqzada, market analyst with ThinkMarkets.

'Great progress'

on vaccine

"Equity markets started off in the red this morning but they have been driving higher... and most European indices are in positive territory," said CMC Markets analyst David Madden.

"The pandemic might not have the same negative impact on equities that it used to, seeing as there has been great progress made with respect to the drug that Pfizer and BioNTech are developing."

US pharma giant Pfizer and Germany's BioNTech on Monday revealed that their candidate for a Covid-19 vaccine had been 90 per cent effective.

Other companies working on vaccines were also believed to be close to announcing good news as well.

But Oanda analyst Edward Moya noted that as the week wore on, investors nonetheless reduced "bullish bets as virus lockdown efforts will likely remain in place throughout the holidays".

Trump's China ban

Meanwhile, markets in Hong Kong and Shanghai were hit by news that US President Donald Trump had signed an order banning investments in Chinese firms that could help the country's military and security apparatus.

The executive order, to take effect on January 11, said Beijing obliges private firms to support these activities and through capital markets "exploits United States investors to finance the development and modernisation of its military".

HANOI, Vietnam — Fifteen Asia-Pacific countries are set to sign an enormous free trade deal at an online summit that started on Thursday, with the pact seen as a coup for China in extending its influence across the region.

Once signed, the Regional Comprehensive Economic Partnership (RCEP) will be the world's largest trade pact in terms of GDP, according to analysts.

The pact, which was first proposed in 2012 and viewed as a Chinese-led rival to a now-defunct US trade initiative, loops in 10 Southeast Asian economies along with China, Japan, South Korea, New Zealand and Australia.

"After eight years of negotiating with blood, sweat and tears, we have finally come to the moment where we will seal the RCEP Agreement per cent this Sunday," said Malaysia's trade minister Mohamed Azmin Ali, ahead of the virtual meeting.

Vietnam's Prime Minister Nguyen Xuan Phuc also confirmed the pact would be signed this week during opening remarks at the online summit.

India had been due to sign the pact but pulled out last year over concerns about cheap Chinese goods entering the country, though it can join at a later date if it reverses its position.

The RCEP — whose members account for around 30 of global GDP — would be a "major positive step forward for trade and investment liberalisation" in the region, said Rajiv Biswas, Asia Pacific chief economist at global business consultancy IHS Markit.

"RCEP will be the world's biggest free trade area measured in terms of GDP," he added.

The pact's expected signing comes as the 10 members of the Association of Southeast Asian Nations (ASEAN) fight to mitigate the heavy cost of the coronavirus, which has ravaged their economies and left many battling a severe public health crisis.

Thorny issues

The pact is also seen as a mechanism for China to draft the rules of Asia-Pacific trade, following years of US retreat under President Donald Trump.

"It certainly lends advantage to China's geopolitical ambitions," said Alexander Capri, a trade expert at the National University of Singapore Business School.

But US President-elect Joe Biden may engage more actively with the region, Capri added, in much the same way as former President Barack Obama did.

"Think of the Biden administration as sort of a continuation of the Obama administration, certainly when it comes to the pivot to Asia," he said.

While the region waits to see how its relationship with the US will unfold, it is battling several other thorny issues — including disputes over the South China Sea.

The flashpoint waters — claimed in their entirety by Beijing but also contested by Vietnam, the Philippines, Malaysia, Brunei and Taiwan — will also be on the agenda at the summit.

But as several nations battle serious Covid-19 outbreaks, and with many promised priority access to Chinese-made vaccines, a stand against Beijing is seen as unlikely.

Instead, the focus will be on economic development in the bloc, with many of its tourism and export-reliant countries suffering badly.

"The road ahead is not a bed of roses," said Vietnamese President Nguyen Phu Trong at the summit, warning that leaders would be expected to work together to control infections and support people who are suffering.

The RCEP could help ease the financial pain, said Kaewkamol Pitakdumrongkit, an assistant professor at the Centre of Multilateralism Studies in Singapore's S. Rajaratnam School of International Studies.

"In the light of Covid-19, RCEP could enable ASEAN to bounce back more quickly as such a deal allows firms to diversify their supply chains and increase resiliency of the regional economies," she added.

DOHA — Gas-rich Qatar has flung open its property market to foreigners, with a scheme giving those purchasing homes or stores the right to call the Gulf nation home.

The scheme, announced in September, is the latest in a series of measures designed to diversify Qatar's economy away from fossil fuel dependency and attract foreign capital ahead of the 2022 World Cup.

Well-heeled individuals are being invited to consider the glistening seaside tower blocks of Doha's man-made Pearl island or the brand new Lusail city project that flanks a World Cup stadium. Retail units in malls also qualify buyers for residency.

The reforms could also help soak up an oversupply of units, which has left gleaming towers half-empty and seen prices drop by almost a third since 2016, according to consultancy ValuStrat's Price Index for residential property.

Previously, investors needed sponsorship from a Qatari business or individual for residency, but now a $200,000 property purchase secures temporary residency for the term of ownership. A $1 million purchase buys the benefits of permanent residency, including free schools and healthcare.

"The reason I didn't buy earlier was that there was so much grey area," said Marketing Director Tina Chadda, a Kenyan who has lived in Qatar for 15 years.

Now she is looking for "a property to live in which I can use to get permanent residency".

"I think this will allow me to call Qatar home. I feel more comfortable now," she said.

Chadda said the visa would also allow her to bring her family, including elderly parents, to Qatar from Nairobi.

"It's a safe country, compared to Kenya."

Foreigners can now house hunt in 25 areas of Qatar — mostly in and around the capital Doha — nine on a freehold basis and the rest with 99-year leaseholds.

Seaviews for most

Gulf countries have long depended on foreign skills and expertise to convert their petrodollars into the region's towering cities, but have seldom made it easy, or cheap, for expats to make their moves permanent.

Similar schemes exist elsewhere in the Gulf, but for a significantly greater outlay. Dubai offers a 10-year residency visa for an investment of $2.7 million, 40 per cent of which must be in property.

So-called "golden visas" and investment passport schemes in several countries have also faced scrutiny over allegations they have attracted corrupt individuals and money laundering.

In Qatar's case, it remains unclear how attractive the tiny, ultra-conservative country — where strict curbs apply to free speech and alcohol sales — will be to wealthy global buyers.

Investment of $200,000 buys a 50 square metre studio in Lusail's new Fox Hills development north of Doha, while $1 million would cover a 330 square metre three-bed seaview apartment in the Pearl.

"These areas have been designated because they have new and developed infrastructure... as well as a distinctive view of the sea for most," said justice ministry official Saeed Abdullah Al Suwaidi.

"There is no big demand, but we are trying to encourage real estate investment," he added. "[We] aim to diversify the economy and not depend on oil and gas."

This marks a step change in the Gulf emirate, where 90 per cent of the 2.75 million people are temporary guest workers, mostly employed on projects linked to the 2022 tournament.

'Hype around 2022'

One estate agent promoting the scheme to clients said, "the whole idea is to have expats and locals working together and trying to promote a long-term outlook for Qatar."

"As the hype around 2022 increases, I think this will naturally create more demand," said Doha-based Sotheby's estate agent Oliver Essex.

In a report issued last month, auditor KPMG said residential property had not been as hard hit by the novel coronavirus pandemic as other real estate in Qatar, with residential transactions worth $1.48 billion reported in the second quarter of 2020.

"However, COVID-19 measures have resulted in government and private lay-offs, which is indirectly leading to exodus of a substantial workforce," it said.

The policy shakeup comes at a time of political crisis, with Qatar under an economic and diplomatic boycott by its neighbours — depressing demand for Qatari property — and faced with low oil prices, which have also undermined prices in other Gulf capitals.

Essex said he expected most of the initial interest to come from foreigners already living in Qatar rather than from investors based abroad.

"I believe mainly Lebanese, Iranians, Egyptian and Indians" will be interested initially, he said.

LONDON — Financial markets were less giddy on Tuesday, but substantial gains continued nonetheless for some stocks and oil prices on strong hopes for a coronavirus vaccine.

News from the US pharmaceutical group Pfizer and Germany's BioNTech about excellent phase-three results for their candidate vaccine "seems to have been a game changer, even if experts warn that production and distribution may take time," remarked Fawad Razaqzada, an analyst at ThinkMarkets.

AJ Bell investment director Russ Mould noted meanwhile that "the stock market is all about pricing in what people think might happen, not what's already happened," as share prices continued to rise.

Pfizer and BioNTech announced Monday that their vaccine candidate was 90 per cent effective in preventing COVID-19.

The scientific community reacted positively, with US expert Anthony Fauci describing the results as "extraordinary" and World Health Organisation boss Tedros Adhanom Ghebreyesus hailing the news as "encouraging".

But others pointed out that data from the ongoing trial still needed review, including the ages of the participants, and that distribution logistics could be challenging as well.

London's benchmark FTSE 100 index ended the day with a gain of 1.8 per cent, after closing almost five per cent higher on Monday.

Advances among individual shares were led by companies that have been hammered for most of the year by lockdowns, particularly airlines.

Top Asian indices, playing catch up with Pfizer's news, were mixed Tuesday, with Tokyo up by 0.3 per cent, Hong Kong gaining 1.1 per cent and Shanghai slipping by 0.4 per cent.

Singapore and Bangkok each soared by more than three per cent.

Leisure stocks and shopping centre groups bounded higher, while tech firms that have benefitted from people being kept at home retreated, as did medical equipment makers.

US vote

On Wall Street the Dow Jones index showed a gain of 0.6 per cent in midday trading as the country slowly emerged from its presidential election drama.

"The clearing of the election fog has permitted underlying market fundamentals to come back into focus and the most recent vaccine news suggests a 'return to normality' should be coming sooner rather than later," said Seema Shah of Principal Global Investors.

Joe Biden's apparent win provided a boost to investors looking for less chaos after four years of Donald Trump, and Republican success in holding on to the Senate could limit attempts by Democrats to push through big tax and regulatory changes.

The chances of a massive new US stimulus package seen to have receded, however.

LONDON — European stock markets and oil prices rocketed on Monday on coronavirus vaccine hopes following successful trials.

Already up strongly on Joe Biden's US election win, markets massively accelerated gains after Pfizer and its German partner BioNTech said their vaccine was 90 per cent effective in preventing Covid-19 infections.

London's benchmark FTSE 100 stocks index surged 4.8 per cent in midday deals.

In the eurozone, Frankfurt jumped 5.2 per cent and Paris soared 6.6 per cent.

Dow Jones futures were up 5.4 per cent ahead of the Wall Street open.

Share prices of airlines led the way, with British Airways parent IAG up more than 25 per cent.

Air France-KLM and Lufthansa made similar jumps — as the news came as a huge relief to a sector battered by virus travel restrictions.

'Spicy cocktail' 

"Stock markets surged on some extremely positive news from Pfizer and BioNTech," said Neil Wilson, chief market analyst at Markets.com.

"The Dow is now seen up 1,300 points (at the official open). Coming on top of the wave of relief from Joe Biden's victory, it's proving a spicy cocktail for stocks."

New York crude advanced 8.9 per cent and Brent North Sea oil was up 8.1 per cent.

The dollar was down versus the euro and pound — and up around 1.5 per cent against the yen.

US currency direction was influenced also by expectations of a big spending bill and American interest rates being kept at record lows for the foreseeable future.

Gold futures, seen as a safehaven investment, were down two per cent.

Biden effect 

Stock markets began rallying on Monday as Biden's election win reduced uncertainty and provided hope that the US would finally agree on a stimulus package to prop up the ailing economy. 

While Democrat Biden has secured enough votes for victory, Republican rival Donald Trump has refused to accept defeat, with legal challenges and recounts looming. 

Oanda analyst Craig Erlam said Trump's actions are seen by markets "as achieving nothing more than delaying the inevitable".

Stocks already began surging last week as it became apparent that Biden was on course for victory and that Republicans would likely hold the Senate, allowing them to rein in any big regulatory or tax policies.

On Monday in Asia, Tokyo's main stocks index closed up more than two per cent to end at a 29-year high before the seismic Pfizer announcement.

Hong Kong, Shanghai, Sydney, Singapore and Seoul all gained more than one per cent, while Bangkok rose over two per cent.

Focus on stimulus 

Traders are looking to Capitol Hill, hoping for a fresh rescue package for the US economy after lawmakers failed to hammer out anything ahead of the vote despite months of haggling.

"More fiscal support is likely forthcoming," said Invesco strategist Brian Levitt. 

"While it may not be the outsize fiscal package that the Democrats had envisioned, it will likely be large enough to provide an additional boost to the economic recovery."

Analysts said a new stimulus was crucial for helping the economy as coronavirus spreads rapidly through the United States, with almost 10 million people having contracted it there.

CAIRO — Despite the pandemic and tourism collapse, Egypt is projecting healthy economic growth this year, even as around one third of the Arab world's most populous country still lives under poverty.

Critics question, however, how much of the gross domestic product (GDP) growth is driven by what is described as “ostentatious” mega-projects, such as a new administrative capital being built in the desert, financed by ballooning debt that will have to be repaid. 

The International Monetary Fund (IMF) in September predicted economic growth of 3.6 per cent for 2020. Although lower than earlier forecasts, this still makes Egypt the only north African economy set to expand this year.

At the same time, almost one third of Egypt's more than 100 million people live below the poverty line, defined as surviving on less than $2 a day, according to the most recent data, for 2017-18.

Egypt's government initially predicted six per cent GDP growth for the fiscal year 2020, which ran from early July 2019 to the end of June 2020.

Toward the end of that twelve-month period, the novel coronavirus outbreak hit, infecting more than 100,000 people in Egypt since and killing over 6,000 of them, according to official data.

The public health crisis forced lengthy lockdowns and hit the tourism sector of the country famed for its archeological heritage and Red Sea beaches, at the cost of countless livelihoods.

Around 2.7 million jobs were lost in April-June, mainly in retail and wholesale, manufacturing, tourism, transport and construction, pushing official unemployment to 9.6 per cent, according to World Bank data.

One of the many people left jobless was a hotel worker who gave his name as Gaber, 36, from southern Egypt, and who was laid off in April by a Red Sea resort suddenly devoid of holidaymakers.

Gaber said he is hoping desperately to find another job as COVID-19 confinement measures are eased, explaining that "I support my four children, my wife and my mother".

Future debt 

Some economists argue the solid GDP growth is the fruit of tough reforms taken since President Abdel Fattah Al Sisi took office in 2014, including austerity measures and a devaluation of the Egyptian pound.

Ahmed Al Safti, managing director of the Delta research centre in Cairo, said the currency devaluation by nearly 48 per cent in November 2016 spurred investment and helped improve the balance of payments. 

The currency devaluation, slashed state subsidies and new taxes qualified Egypt for a three-year $12 billion IMF loan from 2016. 

Sisi's government has touted the tough measures as essential to revitalising an economy that had taken multiple hits since the 2011 popular uprising that toppled longtime ruler Hosni Mubarak. 

Tourism revenues have grown in the years since, and reached a new record of $12.6 billion in 2018-19. Remittances from Egyptians living abroad also hit a record level, of about $28 billion in 2019-20.

But the wealth has been distributed unevenly and many are missing out. Official figures show that 32.5 per cent of Egyptians lived below the poverty line in 2017-18, many impacted by the austerity measures.

“The reforms came at a price," said Safti, "but this price would have been far higher if the government had not implemented the reforms".

The coronavirus outbreak further exacerbated the crisis, especially among the already-vulnerable five million informal sector workers. 

Egypt has launched social protection programmes for low-income families.

But Sarah Smierciak, an independent political economy analyst in Cairo, argued these "are a drop in the ocean, and they fail to reach millions in need".

She also criticised Egypt's focus on ambitious mega-projects, such as a new administrative capital being built outside Cairo, replete with new ministry buildings and hundreds of thousands of flats, an estimated cost of tens of billions of dollars.

Smierciak believes such projects are unlikely "to generate large and sustainable returns" while being "largely financed by [foreign] debt", which soared to $111.2 billion in 2020 from $48 billion in 2015.

"The numbers increasing the GDP now will have to be repaid with interest in the future," she said.

Gaber, the unemployed hotel worker, also feared that these projects "may provide job opportunities to some, but a large segment of the people will not benefit".

AMMAN — LG Electronics Inc. (LG) has announced a 2020 third-quarter revenue of $14.24 billion and operating profit of $807.14 million.

In a statement, LG said its sales and profits were the highest for a third quarter in 62 years of LG Electronics’ history. 

“Led by strong growth in home appliances and home entertainment, overall sales increased 7.8 per cent and operating income improved by 22.7 per cent compared with the same period last year”, the company said.

The LG Home Appliance & Air Solution Company reported third-quarter revenues of $5.18 billion, posting a 15.5 per cent increase from the same quarter last year. 

The company also recorded its highest ever third-quarter operating profit of $565.2 million, an increase of 56.6 per cent from the same quarter last year, it added.

Profit margin of 10.9 per cent marked the third consecutive double-digit quarter for the company.

 For the fourth quarter, the company said it expects to maintain this momentum with plans to grow profitability even more through better cost optimization.

The LG Home Entertainment Company’s sales in the third quarter stood at $3.09 billion, 14.3 per cent higher than the same period last year driven primarily by the resurgence in demand of premium products such as OLED and large screen TVs in mature markets of North America and Europe. 

Its operating income totaled $274.88 million, 13.2 per cent higher than that of the same period of 2019 as a result of more strategic marketing investments despite higher LCD panel prices. The company aims to continue its success by increasing the proportion of premium TVs and its online sales, said the statement.

The LG Mobile Communications Company generated $1.28 billion in sales in the third quarter, virtually unchanged from last year, and 16.5 per cent higher than in the previous quarter. Third-quarter operating loss narrowed from a year ago to $124.9 million due in large part to increased efficiency in production, cost savings from increased ODM (original design manufacturing) and stronger demand for mass-tier models. 

Moreover, the company said it plans to strengthen its mass-tier lineup in North America and Latin America as well as continuing to improve operational efficiency.

The LG Vehicle Component Solutions Company recorded quarterly revenues of $1.39 billion, a 23.5 per cent increase from the same period the previous year. 

An operating loss of $ 55.7 million narrowed significantly from the previous quarter asthe main OEMs in North America and Europe resumed production and cost management efforts took effect. In the fourth quarter, the company said it plans to maximise sales through intense supply chain management and further improve profitability with better cost management.

The LG Business Solutions Company generated third-quarter sales of $ 1.25 billion, an increase of 13.4 per cent from the previous quarter and 1.9 per cent lower than last year. 

Its operating profit totalled 64.8 million, with a 31.1 per cent drop from the same period a year earlier and 22 per cent lower than the previous quarter. 

To improve business-to-business performance in the final quarter of the year, “the company is planning to more aggressively target non face-to-face sales opportunities, improve product competitiveness and strengthen online marketing activities”, it added in the statement.

LONDON — Britain's business community has long hoped for a post-Brexit free trade deal — but government failures mean there will still be "significant" disruption when it is fully free of the European Union next year, an official watchdog warned on Friday.

The coronavirus pandemic, which has already sparked a historic recession in Britain, will add to the strain on freight, farming and other sectors especially in Northern Ireland, with or without an EU trade deal, the National Audit Office (NAO) said in a report.

Britain formally left the bloc in January but remains bound by its rules under a post-Brexit transition period until the end of this year — and still hopes to clinch a trade deal.

The two sides are currently battling to thrash out a new economic partnership, but Britain's full exit will mean changes either way, in particular customs checks for trucks heading to the EU from British ports.

The NAO also backed up complaints by business leaders who have been warning for months that the government is putting all the pressure on companies to prepare, but failing to do enough itself.

'Significant disruption' 

"Even if government makes further progress with its preparations, there is still likely to be significant disruption at the border from 1 January 2021 as traders will be unprepared for new EU border controls which will require additional administration and checks," the NAO said.

The Confederation of British Industry business lobby has already warned that it would be "unconscionable" for Prime Minister Boris Johnson's government to fail to reach a trade deal, given chronic turmoil sparked by the deadly Covid-19 pandemic.

David Henig, trade expert at London-based think-tank the European Centre for International Political Economy, said UK companies faced a historic change in trade relations — regardless of the outcome of talks.

"On January 1, the UK faces the biggest change to trade relations in recent history, deal or no-deal," Henig noted.

"The almost seamless UK-EU trade will be replaced by significant barriers in terms of customs, regulations, and services.

"This will inevitably have an effect on the UK economy. A deal will ease some of the transition, but it will still be a big change."

If Johnson's trade talks flounder with the European Union, the UK will end the transition on a bare-bones arrangement with the EU governed by World Trade Organisation quotas and tariffs.

Even with a deal, companies will wade through reams of new red tape — particularly for the automotive and food sectors — to ensure that goods comply with EU standards.

They will also be compelled to make customs declarations before taking those goods across the border. 

London's financial sector will lose its so-called passport rights that had allowed them to operate across the bloc.

'Worst case scenario' 

Under its "reasonable worst-case scenario", the UK government concedes that queues of up to 7,000 heavy-goods vehicles could develop in southeast England from January 1.

However, it insists it has ploughed more than £700 million ($920 million) into border infrastructure, but business groups say they are hampered by the slow rollout of IT systems identified by the NAO.

Johnson's spokesman pointed to the government spending already made on areas like border infrastructure.

Noting the government's public information campaign and talks with industry groups, he stressed there was also regular contact with businesses.

"We believe significant preparations for the changes have been made and we'll continue to make them to ensure there is a smooth transition," the spokesman said.

The outlook, however, darkened this week after England was shifted into a second virus lockdown to curb soaring virus infections, shattering hopes of a swift economic recovery despite vast stimulus from both the government and the Bank of England.