24
Sep
Supreme Court reduces threat of no-deal Brexit
GDP down -0.2% in Q2. Real risk of recession. Likelihood of no-deal withdrawal decreases. BOE in wait-and-see mode. Possible upswing of long-term sterling rates.
Key points
- Boris Johnson’s strategy defeated by the Supreme Court
- Threat of a no-deal Brexit diminishes
- A technical recession might be avoided following the -0.2% decline in GDP in Q2
- The risks of recession are real
- Still no sign of optimism from leading indicators in August
- Consumers also worried about uncertainty
- Brexit outcome will determine the BOE’s strategy
- Reduced likelihood of rate hike
- Real estate market stabilisation
- Capital markets less attractive
- The key question for the pound’s valuation is: What sort of Brexit?
- Uncertainty persists with regard to equities and real estate
