Market insight: Watch out for the UK Brexit 'economic bounce'

Dr Andrew Lilico, managing director of Europe Economics, says that the big change, for him, on the UK’s path to Brexit, was Boris Johnson’s new proposal. The election, which gave a minority Conservative government, an 80-seat majority, means that there is now no chance of a no-deal Brexit and that all will be in place to end the transition period on 31 December 2020.

Lilico says that there may be a period of agreement based on a WTO type backdrop, but the detail will be ready at the end of the year. On the respective economies, Lilico says that the UK has always been a drag on the European Union and now that the UK has left, the EU will be able to move faster towards greater cohesion to the bloc. On the periphery, he says, there are issues to resolve, but the ‘Macron style proposal, is likely to win through. The UK, on the other hand will see a Brexit bounce and then a period of cost adjustment during the deal making stage, but then the UK should also be in a position to grow faster.

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