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Two years ago, three-quarters of economists surveyed in the annual FT poll said they thought Brexit would harm Britain’s medium-term economic prospects. A year later, 40 per cent had become even more pessimistic, while almost half had maintained their level of pessimism.
Events during the past year have done little to brighten their outlook. Nearly two-thirds of the 107 respondents who answered the question in this year’s FT poll — which was fielded between 8 and 26 December 2017 — said they felt the same as they did a year before. Less than one-in-five said they felt more optimistic.
Economic developments over the past year have been broadly in line with economists’ predictions.
Few respondents said they had learnt anything materially new about the UK’s economic prospects after Brexit from what has happened to the economy this year. But many said political developments had changed the outlook for the UK’s relationship with the EU after March 2019.
Many respondents were reassured that the compromises made by the government to conclude the withdrawal agreement make an adequate transition period more likely and a “no deal” outcome less likely.
“As the UK’s dreams of sealing advantageous international trade deals outside the EU come up against the hard reality of the Irish border, a beneficial continued close trading relationship with the EU becomes more likely,” said Marian Bell of Alpha Economics, a former member of the Monetary Policy Committee.
On the other hand, many were concerned by the glacial pace of negotiations and the apparent lack of preparation within government.
“Time is very short for doing a final trade deal,” said Liz Martins of HSBC. “On the one hand you could argue this points to the UK drifting towards a very soft Norway-style Brexit, but on the other you could say there is still a significant risk of a cliff edge in 2021.” [...]
Full survey on Financial Times (subscription required)
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