Thursday 18 April 2019 11:01 am

No Brexit is now more likely than no-deal Brexit, economists predict

Reporter at City A.M. covering banking, markets and insurance

Reporter at City A.M. covering banking, markets and insurance

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Britain remaining in the EU is now more likely than a disorderly Brexit, according to a Reuters survey of economists.

The poll found that Britain leaving with a free trade deal of some description was still the most likely outcome but Brexit being cancelled jumped above a no-deal scenario into third place in the latest monthly survey.

Read more: Poll: Farage's Brexit party will beat Tories in EU elections

Of the 51 economists surveyed, only one said no-deal Brexit was more than 50 per cent likely – with the median probability staying at 15 per cent.

It comes after EU leaders granted the Prime Minister Theresa May a Brexit extension until 31 October at a midnight summit earlier this month, avoiding a no-deal Brexit the following day.

BNP Paribas economists said: “Apart from the fact that no-deal Brexit is now less likely, the path ahead is as unclear as ever.

“A deal (and likely a softer Brexit) still seems more likely than not. But we are sceptical that this will happen any time soon.”

Economists also unanimously expect the Bank of England to hold interest rates when its Monetary Policy Committee (MPC) meets next month.

But they suggested the next hike could come early in 2020, a quarter later than the previous poll predicted.

Read more: Brexit to place 'considerable demands' on City watchdog

Elizbeth Martins at HSBC said: “Without Brexit uncertainty, the Bank of England might have considered raising interest rates at the 2 May inflation report meeting.

“With the country still in limbo politically, this is highly unlikely.”