AXA IM: UK faces Brexit-fuelled General Election – what happens next?

AXA IM: UK faces Brexit-fuelled General Election – what happens next?

Vooruitzichten Verenigd Koninkrijk
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Onderstaand de belangrijkste punten uit  een onderzoek van David Page, Head of Macro Research bij AXA IM, gericht op de komende verkiezingen in het Verenigd Koninkrijk.

UK faces Brexit-fuelled General Election – what happens next?

In his latest research paper, David Page, senior economist at AXA Investment Managers, provides a detailed analysis on the outlook for the upcoming General Election in the UK.

Key points include:

• The General Election on 12 December will set the course for the UK’s exit – or not – from the European Union and the next phase of Brexit.

• The Tories enjoy a clear lead in the polls, suggesting an outright majority. But the complex dynamics of political pluralism in the UK’s first-past-the-post system casts doubt on this apparent clarity.

• A small Tory majority appears the most likely outcome and should allow the government to pass its deal to achieve Brexit on 31 January.

• We forecast that this outcome could deliver GDP growth of 1.2% in 2020 and 1.0% 2021, reflecting expectations of a renewed global deceleration in 2021. We see the Bank of England leaving rates on hold in 2020 but expect gilt yields and sterling to rise.

• Given low conviction surrounding any election outcome, we look at a number of alternative economic scenarios. Most see uncertainty remaining elevated, but this is likely to be significantly offset by material fiscal easing.