UK’s apparent lack of preparation for Brexit talks is frightening: Official

Daniel Leal-Olivas | AFP | Getty Images

The lack of preparation from the British government in case it doesn't reach a Brexit deal with the European Union has sent alarm bells ringing across international organizations.

David Davis, the U.K.'s lead negotiator in the upcoming exit negotiations with the EU, has said that the government has not studied the economic impact of leaving the Union without a deal. However, the U.K.'s cabinet has repeatedly saying that "no deal is better than a bad deal."

An international official, who didn't want to be named because of the sensitivity of the topic, said that such lack of preparation in spite of the referendum taking place in June 2016 is "frightening."

"I find that frightening. I find that really frightening. We are at eight months from the vote and you still haven't done that calculation," he told CNBC.

The same official added that he is "shocked" by how U.K. ministers are handling this process.

Both London and Brussels have said they will be working hard to reach a deal that will be good for both sides within the two-year timeframe determined under EU law. However, the negotiations will be complex and, with the heavy political calendar in Europe, unlikely to concluded before 2019.

Having no idea of what it would mean economically to exit the EU without any agreements and to be forced to trade with the bloc under World Trade Organization rules "could cut either way," Daniel Gros, director of the Brussels-based CEPS think tank, said.

"Brexiters will think the cost of no deal is low, industry and remainders will think the opposite. Depending on who is stronger this could lead to a more cautious approach," he added.

Prime Minister Theresa May is set to announce the U.K. is ready to negotiate with the EU before the end of March.