The British economy has collapsed due to the epidemic. Now, after a meeting of EU leaders decided that negotiations on a new trade deal with the United Kingdom have not progressed enough, Johnson will face a difficult choice: will it push the discussions beyond the self-imposed deadline, or move away?
CNN According to Business Analysis, CNN According to Business Analysis, CNN According to Business Analysis, CNN According to Business Analysis, CNN According to a business analysis, CNN According to a business analysis, CNN Forecast for City and Institute of Financial Studies. This will further lag the country in its efforts to recover from the historic shocks caused by the epidemic.
“The combination of Covid-19 and its exit from the EU’s single market makes the UK’s outlook extraordinary,” Lure Rance Boone, chief economist for economic organization and development, said in a report this week. “Measures taken in response to epidemics and decisions on future trade relations will have a lasting impact on the United Kingdom’s economic path in the coming years.”
A little progress on the deal
The watch comes on the terms of the United Kingdom and the European Union, Britain will lose its favorable trade position with the blues in late December.
The meetings ended this week without any major success. According to Mujtaba Rahman, managing director of political risk advisory Eurasia Group Europe, the framework for resolving fisheries rights and future disputes are key issues.
“We don’t think the deal will bounce back on the fish, but we think the technical and political challenges it presents will be more difficult than many believe,” Rahman said on Thursday.
Johnson said future trade arrangements need to be hammered out in mid-October to give businesses enough time to plan results. That deadline has now come and gone.
On Thursday, the European Union said it was ready to continue discussions next week. But United Kingdom chief negotiator David Frost said on Twitter that the EU Council’s decision had left him “disappointed” and that Johnson would decide the UK’s position on Friday.
“Johnson’s government is isolated from the coronavirus, the need for political victory, which can only be a deal, is greater than ever,” he said.
Businesses sound alarm
Confusion about where Brexit goes could not come at a bad time for the United Kingdom.
Citi and IFS estimate that the UK economy will shrink by 9.4% this year. That would be the biggest decline since 1921, according to data from Bank of England. Additional sanctions in effect could make matters worse.
A turbulent break with the EU at the peak of the coronavirus recession will only prolong recovery.
With limited trade agreements, the UK economy is set to rebound with growth of 6.6% in 2021 before losing some momentum between 2022 and 2024, according to IFS and Citi estimates. Failure to reach trade deals with Europe will shave up to one per cent of that level of growth. The difference is about 20 20 billion or more than 25 25 billion.
According to economists at CT and IFS, even the best of limited trade agreements will leave the UK economy small by 5.1% in 2021 if the transition period is extended indefinitely.
With a view to significant uncertainty, businesses are expressing concern about the next few months.
In a survey of more than 950 officers released Friday by the Institute’s DirectF directors, nearly a quarter of respondents said they were not sure they would be ready for the end of the transition period.
“The prospect of any deal would be daunting enough, let alone deal with it in the midst of a global epidemic,” said Eli Rennis, IOD’s senior policy adviser. “These interruptions will not cancel each other out. If anything they will cause suffering for British businesses.”