The UK economy will have a tough time posting even moderate growth next year without an orderly Brexit, the Confederation of British Industry (CBI) warned today.
The CBI’s forecast of 1.3 per cent growth in 2018, 1.4 per cent in 2019 and 1.6 per cent in 2020, a slightly lower set of predictions than the Bank of England’s, relies on the Prime Minister winning parliamentary support for her Brexit withdrawal agreement next week.
However, the deal – which would see the UK tied into a temporary customs union with the EU without being able to leave of its own accord – has been met with heavy criticism from all sides ahead of the vote on whether or not to approve it on Tuesday, 11 December.
“A no-deal scenario would blow these figures out of the water,” said Carolyn Fairbairn, director-general of the CBI, according to Reuters.
It comes just a day after JP Morgan halved the risk of the UK crashing out of the EU without a deal, though it also narrowed the chance of May’s deal passing through parliament to 50 per cent, down from 60 per cent.
The bank also said that the chance of the UK remaining in the EU had doubled to 40 per cent.
Shares in FTSE housebuilders, banks and airlines rose on the possibility of a softer Brexit yesterday.
However, the FTSE 100 fell by over one per cent this morning after a key Huawei executive was arrested in Canada with an agreed extradition to the US.
CFO Meng Wanzhou was arrested over suspected violation of US sanctions surrounding trade with Iran.