Brexit Impact on UK Economy and Business, Forecast to 2023

Brexit Impact on UK Economy and Business, Forecast to 2023

GDP Growth to Dip to Negative 0.4% by 2021 in No Deal Scenario; Growth to Weaken but Remain Positive in Other Probable Scenarios

RELEASE DATE
10-Aug-2018
REGION
Europe
Research Code: 9AE6-00-03-00-00
SKU: CI00551-EU-MR_22174

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Description

With Brexit day fast approaching, this study examines the implications of Brexit for the UK economy and UK businesses. Key topics covered include transition period impact, UK-EU post-Brexit relationship scenarios, scenario-based macroeconomic outlook, and scenario-based industry outlook for the automotive and financial services industries.

Brexit negotiations commenced back in June 2017, and thus far, Phase 1 negotiations and discussions on the transition period have been completed. However, implementation of the points agreed to during these discussions is contingent upon the finalization and ratification of a withdrawal agreement. Consequently, should a no deal scenario unfold, a transition period would not come into effect. Should an agreement be ratified, a transition period would come into effect from March 29, 2019 (Brexit day) to December 31, 2020, thereby giving businesses an additional 21 months to prepare for permanent post-Brexit UK-EU relations. The UK is expected to remain in the EU Single Market and Customs Union during the transition period.

The potential post-Brexit UK-EU relationship scenarios include the Comprehensive Economic Trade Agreement (CETA) or CETA Plus type scenario, the no deal scenario, the soft Brexit scenario (based on Chequers meeting and UK government whitepaper), and the deep bespoke scenario. The deep bespoke has not been analysed in detail in this study as it is contingent on the extension of UK-EU negotiations. Amongst CETA or CETA Plus, no deal, and soft Brexit, the no deal scenario is expected to have the most damaging impact on the UK economy given no transition period, higher trade tariffs, anticipated relocation of businesses and so on. GDP growth is expected to turn negative under a no deal scenario, while weakening but remaining positive under other probable scenarios.

The United Kingdom’s automotive industry has already witnessed a dip in investment and production in the light of Brexit, with the no deal scenario posing serious threat to the industry. The study examines the implications of the potential post-Brexit UK-EU relationship scenarios across important areas such as vehicle certification, customs checks, rules of origin, and trade costs. With regards to financial services, the likelihood of retention of passporting rights is very low and UK based firms have already been moving staff to the EU to ensure sustained market access.

Key Issues Addressed

  • What is the Brexit process expected to look like and what are the key timelines?
  • What are the implications of a transition period for UK businesses and the UK economy?
  • What are the United Kingdom’s red lines in regards to post-Brexit UK-EU relationship models?
  • What are the potential post-Brexit UK-EU relationship scenarios and their implications for trade, customs checks and so on?
  • How do the potential post-Brexit UK-EU relationship scenarios compare against each other?
  • What is the Brexit scenario-based outlook for the United Kingdom’s GDP growth, monetary policy, and migration?
  • What is the Brexit scenario-based outlook for the automotive and financial services industries?
  • How does passporting compare to equivalence, enhanced equivalence and mutual regulatory recognition?

Table of Contents

Planning for Brexit

Transition Period—Benefits to the UK

UK-EU Post-Brexit Relationship—Summary of Potential Scenarios

Scenario-Based Macroeconomic Outlook Under Brexit

Research Scope

Glossary

Glossary (continued)

Brexit Process

Phase 1 of Negotiations

Transition Period—An Introduction

Transition Period—Impact Analysis

Transition Period—Impact Analysis (continued)

UK-EU Post-Brexit Relationship Scenarios

UK-EU Post-Brexit Relationship—The UK’s Red Lines

UK-EU Post-Brexit Relationship—The UK’s Red Lines (continued)

UK-EU Post-Brexit Relationship—Summary of Potential Scenarios

UK-EU Post-Brexit Relationship—CETA

UK-EU Post-Brexit Relationship—CETA Plus

UK-EU Post-Brexit Relationship—No Deal or WTO Scenario

UK-EU Post-Brexit Relationship—Soft Brexit

GDP Growth

Monetary Policy

Migration Trends

Migration Trends (continued)

Minimum Wage Hikes

Automotive Outlook

Automotive Outlook (continued)

Financial Services Outlook

Financial Services Outlook (continued)

Key Conclusions

Legal Disclaimer

List of Exhibits

The Frost & Sullivan Story

Value Proposition—Future of Your Company & Career

Global Perspective

Industry Convergence

360º Research Perspective

Implementation Excellence

Our Blue Ocean Strategy

Related Research
With Brexit day fast approaching, this study examines the implications of Brexit for the UK economy and UK businesses. Key topics covered include transition period impact, UK-EU post-Brexit relationship scenarios, scenario-based macroeconomic outlook, and scenario-based industry outlook for the automotive and financial services industries. Brexit negotiations commenced back in June 2017, and thus far, Phase 1 negotiations and discussions on the transition period have been completed. However, implementation of the points agreed to during these discussions is contingent upon the finalization and ratification of a withdrawal agreement. Consequently, should a no deal scenario unfold, a transition period would not come into effect. Should an agreement be ratified, a transition period would come into effect from March 29, 2019 (Brexit day) to December 31, 2020, thereby giving businesses an additional 21 months to prepare for permanent post-Brexit UK-EU relations. The UK is expected to remain in the EU Single Market and Customs Union during the transition period. The potential post-Brexit UK-EU relationship scenarios include the Comprehensive Economic Trade Agreement (CETA) or CETA Plus type scenario, the no deal scenario, the soft Brexit scenario (based on Chequers meeting and UK government whitepaper), and the deep bespoke scenario. The deep bespoke has not been analysed in detail in this study as it is contingent on the extension of UK-EU negotiations. Amongst CETA or CETA Plus, no deal, and soft Brexit, the no deal scenario is expected to have the most damaging impact on the UK economy given no transition period, higher trade tariffs, anticipated relocation of businesses and so on. GDP growth is expected to turn negative under a no deal scenario, while weakening but remaining positive under other probable scenarios. The United Kingdom’s automotive industry has already witnessed a dip in investment and production in the light of Brexit, with the no deal scenario posi
More Information
No Index No
Podcast No
Author Neha Anna Thomas
Industries Cross Industries
WIP Number 9AE6-00-03-00-00
Keyword 1 Brexit Impact
Keyword 2 UK Economy
Keyword 3 UK Business
Is Prebook No
GPS Codes 9A6B