18th Feb – Diana Mousina, Economist – Investment Strategy and Dynamic MarketsSydney Australia

The Brexit date is fast approaching (29 March) but the future of the UK/EU relationship is still uncertain. Diana Mousina, Senior Economist, AMP Capital Australia, looks at what the next steps are for the UK before the Brexit deadline and what the future of the UK and Euro area economies look like post-Brexit.

The key points are:

  • The UK will either have to leave the EU with an agreement in place (soft Brexit) which would cause little disruption to the economy and markets or leave the EU without any arrangement (hard Brexit). In this case, trade with the EU and other countries would be conducted using World Trade Organisation Rules causing significant disruption to the UK and broader Euro area.
  • Alternatively, negotiations around the current agreement could continue with a delayed exit date. Other possibilities if an agreement cannot be met include a new Brexit referendum, a change of Prime Minister or an election.
  • A hard Brexit could cause a UK recession this year, hit already low European growth as well as UK and Euro equities and the British pound.

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