As Brexit could dramatically alter the near-term outlook for the economy, we are continuing to publish three sets of forecasts based on different Brexit outcomes (deal, no deal and more delays). But there are three common themes to this economic multiverse. First, GDP growth in 2021 may be reasonably good in all scenarios (although growth would slow sharply after a no deal Brexit and a decent rebound would require a swift and strong policy response). Second, fiscal policy will be much looser over the next few years than over the past few years. And third, inflation will spend most of the next two years above the 2% target. Those themes point to higher interest rates in time. If there is a Brexit deal or a delay, then interest rates may rise next year. If there’s a no deal Brexit, rates would be cut first.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to gain:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services