India's Budget 2025-26 cOVEAGE
Presented by:
spot_img

Economists say, Britain’s economy to make a moderate post-Brexit recovery if deal agreed

Date:

Trending

Britain‘s economy will barely grow in the run-up to Brexit amid concern the UK will leave the European Union without an agreement, but if there is a deal there will be a modest post-divorce upturn, according to economists polled by Reuters.

- Advertisement -

Economists mostly said a free-trade deal between the two will be made and expectations that Britain will leave on March 29 without an agreement have barely changed over the past month.

Growth slumped to 0.2 percent last quarter as Brexit worries hammered investment by companies and a global economic slowdown weighed on trade. The February 8-12 Reuters poll said it would expand at the same rate this quarter.

- Advertisement -

Polls conducted by Reuters since the June 2016 referendum decision to leave the EU have consistently said a no-deal Brexit would be the worst outcome for the British economy.

The chance of a no-deal Brexit nudged up only to 25 percent in the latest poll from the 23 percent given in January and, with a deal expected, growth is forecast to accelerate to 0.3 percent next quarter and to 0.4 percent in the third.

“If there’s a silver lining from the mounting signs that the uncertainty caused by Brexit is holding back GDP growth, it’s that the economy could enjoy a decent rebound if a Brexit deal is agreed,” said Paul Dales at Capital Economics.

The likelihood of a recession in the coming year held firm at 25 percent and the probability of one in the next two years at 30 percent.

“Although the economic headwinds have increased in recent quarters, the most likely way in which a recession will be triggered is if Brexit goes badly wrong,” said Peter Dixon at Commerzbank.

Prime Minister Theresa May is trying to convince the bloc to amend a divorce deal that she agreed with it in November but that was rejected by her own parliament. As it stands, the UK will leave the EU in 44 days without a deal.

May told British lawmakers from all parties on Tuesday she wanted them to back the Brexit deal she is aiming to strike, citing the need to pass further legislation to prepare for Britain’s exit. May said she believed she could reach a Brexit deal parliament could support.

European Union Brexit negotiator Michel Barnier said on Monday the bloc would agree to tweak the political declaration on EU-UK ties after Brexit that forms part of the exit package.

FREE-TRADE DEAL

As in all Reuters polls since late-2016, the vast majority of economists said the two sides would settle eventually on a free-trade deal.

Holding again in second place was Britain being a member of the European Economic Area, paying into the EU budget to maintain access to the EU’s single market.

The third and fourth spots flipped, with Britain leaving without an agreement and trading under basic World Trade Organization rules now in third place and Brexit being cancelled last.

Apart from January’s poll, Brexit being cancelled was in last place every time Reuters has asked.

The Bank of England said last week Britain faces its weakest economic growth in a decade this year, but also said interest rates would eventually rise if an EU divorce deal is done.

Other major central banks have signalled they will hold off on raising borrowing costs but BoE Governor Mark Carney stuck to his message that gradual and limited rate rises are coming if a no-deal Brexit is averted.

Economists polled by Reuters took him at his word and medians suggest a 25 basis point increase to Bank Rate to 1.00 percent would come in the fourth quarter, later than thought last month. Another 25 basis point was predicted in the second half of next year, also later than previously thought.

“The combination of Brexit uncertainty, slowing world – and UK – economic growth and lower forecasts for inflation suggests a far slower normalisation of policy,” said George Buckley at Nomura, who pushed back his expectation for the first hike to November from May.

Carney said on February 12 a modest tightening of monetary policy over time would likely be sufficient to achieve the Bank’s 2 percent inflation target. The poll pegged inflation to average the target this year and next.

THE SNAPSHOTS

Sign up to get quick snaps of everyday happening, directly in your inbox.

We don’t spam! Read our privacy policy for more info.

- Advertisement -

Support our independent journalism PayPal (Outside India) For PayU (For Indian Readers).

Krishna Mali
Krishna Mali
Founder & Group Editor of TechGraph.

More Latest Stories

More Articles

Preparing Your Staff To Host A Successful Business Event In Another City

A business event, a convention, and exhibition, a trade show - all of these alternatives, similar as they are, can be truly significant for...

TradeFT Review: Comprehensive Platform Overview 2025

The financial markets are abuzz with some pretty exciting developments as 2025 gets underway, particularly in the world of cryptocurrencies. Not long ago, Bitcoin broke through the $100,000 barrier prelude to a new beginning of growth and possibility for investors. In this exciting environment,...

Income Tax Slabs Revised in Budget 2025-26: Experts Applaud Relief for Salaried Class, VDA Taxation Still a Concern

With income tax exemption raised to ₹12.75 lakh and revisions in tax slabs, the...

Union Budget 2025-26: MSME Leaders Back Investment Limit Hike, Call E-Shram Expansion Crucial

The MSME sector has responded positively to the Union Budget 2025-26, with experts highlighting...

Union Budget 2025-26 Reactions: Education Sector Applauds AI, Skilling Initiatives but Flags Funding Gaps

India’s education sector leaders have responded to the Union Budget 2025-26 with optimism and...

Union Budget 2025: India’s AI Budget Allocation Stirs Mixed Reactions

India’s Finance Minister Nirmala Sitharaman's announcement of a ₹500 crore fund for a Centre...

Union Budget 2025: Medical Education Seats Increased by 130% in 10 Years; 10,000 More to Be Added

Education sector Budget LIVE: Presenting the Union Budget 2025-26, Finance Minister Nirmala Sitharaman announced...

Union Budget 2025: Kisan Credit Card Loan Limit Increased to ₹5 Lakh Under Modified Interest Subvention Scheme

Finance Minister Nirmala Sitharaman, in her Union Budget 2025-26 speech, announced an increase in...

From GCC & AI to DeepTech Investments: How Tech Experts React to the Union Budget 2025

Finance Minister Nirmala Sitharaman’s Union Budget 2025-26 has drawn mixed reactions from technology industry leaders, particularly on the government’s push for deep tech and...

Union Budget 2025: IIT Student Strength Doubles, ₹500 Crore AI Education Center Announced

Finance Minister Nirmala Sitharaman, while presenting the Union Budget 2025-26 in Parliament today, outlined...

Union Budget 2025 LIVE: FM Sitharaman Announces Reforms in Finance Sector; Increases FDI Limit to 100%

Finance Minister Nirmala Sitharaman, while presenting the Union Budget for 2025-26 in Parliament today,...

Budget 2025 Expectations: Education Sector Call for Investment in Education Infrastructure and Support for Skill Training

With the Union Budget 2025 on the horizon, the education and skill development sector...

AI in Skill Development: What Budget 2025 Should Do to Close the Workforce Skills Gap

India, with its vast pool of young talent, faces a significant challenge: a widening...

Union Budget 2025 Expectations: Hospitality Sector Urges Budget Support for Tourism Growth and Workforce Development

With the Union Budget 2025 on the horizon, hospitality sector leaders are calling for stronger government support to fuel tourism growth. Industry voices highlight...

Cash out Tether USDT to Renminbi in Guangzhou

If you need to quickly and safely Cash out Tether USDT to Renminbi in Guangzhou, then it is best to use the services of electronic exchangers. They provide more convenient, more profitable and safer ways of exchange than alternative methods such as transfers through...

Union Budget 2025 Expectations: Insurance Sector Eyes Tax Incentives, Sops to Expand Health Insurance Reach

As Finance Minister Nirmala Sitharaman prepares to present the Union Budget 2025 on February...

Union Budget 2025: Farming, Agriculture Sector Pushes for Greater Subsidies, Policy Support

With Union Budget 2025 just days away, the agriculture sector is vouching for a...

Gaming Industry Eyes Budget 2025 for Relief on GST and Boosted AVGC Support

With the Union Budget just days away, the gaming sector is growing hopeful that...

Budget 2025: Tax Reforms, Infrastructure Financing, and NBFC Support Top Budget Wishlist

As Budget 2025 approaches, experts from the NBFC, finance, and business sectors are voicing...

Adoption of Low Code Platforms by MSMEs for Operational Efficiency of Their Supply Chains

Micro, small, and medium enterprises are the backbone of the world and account for...

Krikya Bangladesh Casino App Review

The Krikya app delivers a seamless and engaging mobile gambling experience for users of...

Union Budget 2025 Expectations: Housing, Real Estate Sector Call for Middle-Class Relief and Affordable Housing Revival

With just days to go before the Union Budget 2025, leaders from the real...

Luck vs. Strategy: Spinstralia’s Guide to Smarter Gaming for Australians

Online betting has always been a thrilling activity for Australians, a pastime that blends...

EV Sector Call for 5% GST, ITC Reforms, and Enhanced PLI in Budget 2025

As the date for the Union Budget 2025 draws near, the electric vehicle (EV)...

Budget 2025 Expectations: Education Sector Call for Investment in Education Infrastructure and Support for Skill Training

With the Union Budget 2025 on the horizon, the education and skill development sector...

Budget 2025: Pre-Owned Car Market Requests Financing Reforms, Auto Industry Looks for GST Clarity

With the Union Budget just days away, the auto sector is hoping for game-changing...

Budget 2025 Expectations: Semiconductor Industry Looks for Support to Boost Domestic Manufacturing, Incentives, and Innovation Investment

As India's Union Budget 2025 approaches, the semiconductor manufacturing sector is seeking measures to...

BUDGET 2025: Sustainability Sector Hopes for Strong Budget Support to Drive Clean Energy and Circular Economy

As the Union Budget 2025 draws near, expectations are building in the sustainable and...

Solar, Renewable Sector Expects Tax Breaks, Subsidies for BESS & Solar Financing Reform From Budget 2025

As Union Budget 2025 approaches, renewable energy leaders are urging Finance Minister Nirmala Sitharaman...

AI in Skill Development: What Budget 2025 Should Do to Close the Workforce Skills Gap

India, with its vast pool of young talent, faces a significant challenge: a widening...

Luck vs. Strategy: Spinstralia’s Guide to Smarter Gaming for Australians

Online betting has always been a thrilling activity for Australians, a pastime that blends...

REVIEW: PokieSurf Casino Mobile Gaming Experience

If you’re chasing the thrill of online casino no deposit bonus free spins Australia,...

EV Sector Call for 5% GST, ITC Reforms, and Enhanced PLI in Budget 2025

As the date for the Union Budget 2025 draws near, the electric vehicle (EV)...