Arbuthnot Banking : The pace of UK-EU Brexit negotiations is picking up, and the UK prepares for “no deal”

The pace of UK-EU Brexit negotiations is picking up, and the UK prepares for 'no deal'

Date: 3^rd September 2018

The pace of UK-EU Brexit negotiations is picking up, and the UK prepares for 'no deal'
In this Perspective Ruth Lea, Economic Adviser to the Arbuthnot Banking Group, discusses the latest developments in the Brexit negotiations:

• The UK government's policy remains one of agreeing a 'deal' with the EU, but preparations are being stepped up for a 'no deal'.
• DExEU Secretary of State Dominic Raab released 25 documents on 'no deal' preparations on 23 August.
• Looking ahead there are major uncertainties concerning the negotiations. The first relates to the timetable for completing the talks. It now looks almost certain that EU Commission chief negotiator Barnier's original deadline of early October will slip into early November.
• The second uncertainty relates to the outcome. There are two broad outcomes. The first is that a deal on the Withdrawal Agreement and the political declaration on the future relationship is 'successfully' negotiated and implemented.
• The second is where proceedings do not go 'according to plan.' The main risks are, firstly, where MPs fail to approve any deal that is agreed by the UK and the EU and, secondly, where the UK and the EU fail to agree a deal by 21 January 2019 (or, alternatively, where the PM announces prior to 21 January 2019 that no deal has been agreed). Under these circumstances, the Government would have to present new plans to Parliament.

The latest UK economic indicators suggest:

• There seems to be some modest softening in the data on lending to individuals, though unsecured credit growth is still buoyant.
• The public finances seem to be improving faster than anticipated by the OBR in March 2018. The OBR's forecast for public sector net borrowing of £37.1bn for FY2018 should be comfortably undershot.

Both the MPC and the Governing Council of the ECB are due to make their next monetary policy announcements on 13 September. No changes in policy are expected.
Ruth Lea said, 'After a summer lull, the pace of the UK-EU Brexit negotiations has undoubtedly picked up recently. Whilst acknowledging that the Government's priority is still to agree a deal with the EU, it is right that the Government is also making preparations for a 'no deal' outcome.'

For full story: http://www.arbuthnotgroup.com/economic_perspectives_group.html

Press enquiries:

Arbuthnot Banking Group PLC:

Ruth Lea, Economic Adviser
07800 608 674, 020 8346 3482
[e-mail]
Follow Ruth on Twitter @RuthLeaEcon

Maitland:
Sam Cartwright
020 7379 4415
Jais Mehaji
020 7379 5151
[e-mail]

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