Economy

30 March 2017

Brexit begins

Now that Article 50 has been triggered, the two years of negotiation can start. The task will not be easy and with many obstacles such as the Brexit bill, the possible referendum in Scotland or the wavy political context in France or Germany. A positive deal remains mutually beneficial but the willingness to punish the UK to maintain the integrity of the EU combined with the strength of the anti-EU movement in the UK should lead to a hard Brexit.

Key points
  • In the UK, the negotiation should be torn between the economic losses and the political will. The process should last long.
  • From an economic perspective, the UK should experience a depreciation of the Sterling pound, a slump of consumption/investment and a maintenance of accommodative monetary policy.
  • The UK accepts it won’t keep membership of the single market, but is seeking something that is close, minus the free movement of people.

Download here the full study.

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