"Divorce with Europe" is close and we already have early signs about it
Philip Hammond said last week that a good deal on Brexit would allow him to break the regime of constraints in the economy. Bank of England Governor Mark Carney said the economy would finally come out of the "mist" after nearly two years of uncertainty.
Business investment
BOE cut its forecast for business investment in its renewed economic forecast last week. The Purchasing Manager's Survey with its data only confirmed the forecast, depicting a dramatic picture of the companies in all sectors.
Influx of investment
BOE predicts catching-up investment and their hurry after Brexit. This scenario is taken into account in the Bank's forecast, which I suppose a smooth transition. They forecast zero investment growth this year, but growth by 5% in 2020.
Inflation
One of the direct consequences of Brexit will be in the currency markets, which have shown that they are quite sensitive to the news and the events surrounding the negotiations. Just as the Pounda referendum has fallen and inflation has increased, we can see a significant appreciation of the currency to suppress price growth.
Source: Bloomberg Finance L.P.
Charts: Used with permission of Bloomberg Finance L.P.
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