A no-deal Brexit remains the legal default after March 29, despite much action in the UK Parliament this week. An extension of Article 50 now seems inevitable, but uncertainty remains over how long the extension will be. While Brexit dominates the immediate outlook for the UK economy, it will be the politics in London, Brussels and other European capitals that will determine the path taken.
In the Spring Statement, the Chancellor Philip Hammond expected economic growth in the UK to slow in 2019 and pick up subsequently. This growth pattern is likely to be mirrored in the global economy. In our latest paper, Dr Gerard Lyons, senior economic adviser at Parker Fitzgerald, suggests that the outlook for both the UK and the rest of the world will be one of near-term caution and longer-term optimism.
Chief among the risks in the year ahead are the global debt overhang, the US-China trade war, and the rise of identity politics. These near-term risks should be taken seriously, but at the same time there are positive, long-term trends that warn against being too pessimistic. We explore growth drivers in the years ahead, the next phase of unconventional monetary policy, and policy implications as economic and political cycles return.
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