The six-month delay to Brexit until 31st October 2019 has put the brakes on interest rate hikes and left the economy travelling in the middle lane, with GDP likely to rise by 1.5% this year. But should a Brexit deal be struck in October, which is our working assumption, then the economy is well placed to accelerate in 2020 with growth of around 1.7%. It may then move into the fast lane in 2021 growing by about 2.2%, which would mean growth in the UK overtakes growth in the US and the euro-zone. So although UK interest rates and the pound are unlikely to rise this year and will probably only edge higher in 2020, they may both surprise on the upside in 2021.
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