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The UK Economy to Improve Gradually If Soft Brexit Achieved

The Confederation of British Industry (CBI) has outlined the possibility of a gradual improvement in the UK economy. However, in their report, the CBI point out that this will only happen in the event that the country agrees to a suitable post-Brexit trade deal that aligns with the current EU rules.

What Do They Forecast?

The recent BCI forecast shows growth levels in the economy over the next two years that they label as modest. This is because they predict a 1.3% increase in 2019 followed by 1.2% in 2020. According to their numbers, 2021 could then see a rise to 1.8% growth levels. 
These numbers are based on the UK leaving the EU by the end of January 2020. The CBI also state that their figures assume that there will be “clear line of sight” to a suitable trade deal that fits in with the existing EU rules.

While the CBI confirms that uncertainty over Brexit and the risk of a no deal departure are the biggest risks, they aren’t the only ones currently present. They also point out that any further complications in the trade war between the US and China could affect the entire global economy, including the UK.  
Rain Newton-Smith is chief economist at the CBI. She said that businesses in the UK are still showing “remarkable resilience after more than three years of crippling uncertainty”. Newton-Smith pointed out that the long-standing uncertainty over Brexit has been joined by softer global demand in the list of issues that British firms have had to deal with.

She stated that there should be a “gradual pick-up in activity” if these issues subside over time. However, she also confirmed that this can only happen if there is a good Brexit deal that allows for frictionless trade while protecting the country’s powerful services sectors.
On the other hand, a no-deal Brexit would halt UK growth. The CBI economist also said that this would “realise businesses’ worst fears”. This possible scenario partly explains why there has been increased activity for debt collection firms, as companies look to protect themselves in the event of a serious downturn. 

British Factories to End 2019 at a Standstill

A separate report has also been issued by the Make UK manufacturing group. They say that British factories are currently suffering due to the ongoing doubts over Brexit as well as the global slowdown. In fact, their research suggests these factories will be at a “standstill” at the end of 2019.
The group came to this worrying conclusion by speaking to over 330 firms. The overall conclusion that they found was that most companies aren’t yet ready to increase investment levels until they understand what exactly will happen with Brexit.
Their results show that the number of orders in the manufacturing industry have come to a halt. The number of orders waiting to be completed are said to be a lot lower than the peaks that were achieved in 2017.