Under the Bank of England’s worst-case scenario, exporters would face £27 billion of additional red tape

British factories are setting up distribution hubs in Europe to ensure that they can maintain sales on the Continent after Brexit, according to the Bank of England.

Its agents’ report for the first quarter of the year reveals that manufacturers are making preparations in case there are delays at the border. It suggests that manufacturers expect disruption after Britain leaves the European Union.

The Bank publishes a summary of reports compiled by its 12 regional agents after their discussions with at least 700 businesses across the UK every quarter. The results of their work play an important part in the monetary policy committee’s deliberations on interest rates.

The agents’ report said that as well as building warehouses in Europe, manufacturers are “considering investing in infrastructure