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Quarterly Brexit Report Q4 2017: Executive Summary

January 11th, 2018

We are pleased to announce the update of our Quarterly Brexit Report for Q4 2017. This report is a partner piece to the Brexit Scenarios Tool, our interactive market intelligence dashboard, available on our website and on Passport. Our analysis helps clients to stay informed with the Brexit process as it unfolds, and to understand the impact of different Brexit scenarios on the UK economy, industries and consumers.

 

After the decision to postpone the second phase of negotiations between the United Kingdom (UK) and the European Union (EU) to mid-December 2017, as a result of insufficient progress in the first phase, the deadlock was finally broken in early December when the three key points of the Brexit divorce were agreed. Although the financial settlement initially caused the impasse, it was the question of the Irish border that proved to be the most difficult to appease all parties involved.

With the foundations for a deal in place, the UK and EU will proceed to discussions about future relations and a trade deal. However, the outlook for the UK economy remains weak despite a low unemployment rate averaging 4.3% in Q3 2017. Inflationary pressures have increased following the Brexit vote, pushed up by the weaker pound, prompting the first interest rate increase in a decade by the Bank of England in November. Euromonitor International forecasts real GDP growth of just 1.2% for the UK in 2018, amongst the weakest of the G7, as Brexit continues to dominate the investment environment.

Euromonitor International’s Brexit Scenarios

Euromonitor International’s baseline scenario already incorporates the likelihood (40-50% probability) of a Delayed Free Trade Agreement, where the UK remains in the EU for another two to three years until a deal is reached. The quarterly report examines the impact of a No-Deal Brexit scenario (35-45% probability) on our baseline, alongside the much slimmer prospect of a Light Brexit (5-15% probability).

Find out more in our Quarterly Brexit Report for Q4 2017.

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