Uncertainty has been the dominant theme of the EY ITEM Club forecasts over the three years since the Brexit referendum.
With the UK recently agreeing a withdrawal agreement with the European Union, hopes were raised that we might be about to move forward with more certainty. However, with the agreement yet to be passed by Parliament, the outlook remains unclear.
Expectations may have been running ahead of themselves in any case. The withdrawal agreement only covers the next 14 months, and, as it defines the terms of the UK’s exit, offers almost no additional guidance on the future of its trading and other relationships with the EU after 2020.
In so far as we can glean anything about likely conditions after 2020, the political declaration suggests a much less comprehensive relationship than currently, which, other things being equal, the majority of forecasters believe is likely to mean a slower UK GDP growth rate after 2020 compared to staying in the EU.