UK: Brexit likely postponed as Covid-19 takes its toll – Handelsbanken

Economists at Handelsbanken expect the UK to be highly impacted by the Covid-19 and the pound to suffer due to Brexit uncertainty.

Key quotes

“UK GDP will probably fall by double digits in the second quarter of this year, before a modest recovery starts in the second half of 2020 as social distancing measures are gradually rolled back.” 

“We believe unemployment could also reach double digits this year, before easing towards year-end.” 

“Brexit will most likely be postponed, and Brexit uncertainty dampens the economic recovery.” 

“The BoE will probably keep the policy rate at 0.1 percent for several years, and we expect the pound to weaken as Brexit uncertainty increases again.”