No-trade-deal Brexit would lower GDP by 1 ppt by 2022

摘要

1. A no-trade-deal Brexit would result in UK GDP being 1ppt lower than our baseline forecast at the end of 2022. Increased trade frictions and a negative reaction from financial markets would more than offset looser policy settings. 2. Even if an FTA is agreed, trade between the UK and EU will be subject to new customs and regulatory trade barriers. If a trade deal is not agreed, tariffs will also be levied on UK-EU trade, while non-tariff barriers are likely to be higher. 3. no-trade-deal outcome would almost certainly see the BoE undertake further quantitative easing. A further, temporary, loosening of fiscal policy would also be likely, with higher government investment an obvious option.