21 C
New York
Tuesday, June 22, 2021

Economists stick to Brexit forecasts despite no-deal rhetoric

Must read

Let’s talk, says Spain, as jailed Catalan separatists are pardoned

World5 minutes ago (Jun 22, 2021 01:37PM ET) 2/2 (C) Reuters. FILE PHOTO: A protester waves an Estelada (Catalan separatist flag) during a demonstration outside the...

U.S. Fed bank stress tests pave way for stock buyback, dividend bonanza

(C) Reuters. FILE PHOTO: A combination file photo shows Wells Fargo, Citibank, Morgan Stanley, JPMorgan Chase, Bank of America and Goldman Sachs from Reuters...

U.S. Senate confirms Biden intel pick after Republicans cite Huawei link

Stock Markets7 minutes ago (Jun 22, 2021 01:35PM ET) (C) Reuters. WASHINGTON (Reuters) - The U.S. Senate on Tuesday confirmed President Joe Biden's nominee Christopher...

Jet Airways shares more than halved since closure of operations in 2019

NEW DELHI: Shares of Jet Airways, whose likely revival is in sight with NCLT approving a resolution plan, have lost more than half of...
imageEconomy9 minutes ago (Sep 07, 2020 11:35AM ET)

(C) Reuters. FILE PHOTO: Small toy figures are seen in front of a Brexit logo in this illustration picture

By Julien Ponthus and Olga Cotaga

LONDON (Reuters) – Economists stuck to their forecasts on Monday that Britain and the European Union would agree some sort of post-Brexit trade deal, taking the view that London is likely toughening its rhetoric in a bid to pressure Brussels into a compromise.

The talks are back in crisis and the pound is bearing the brunt on renewed fears of a disorderly exit from the EU after the British government was reported to be planning legislation to override parts of the Withdrawal Agreement it signed in January.

“Rhetoric in past few days has been ramped up, but we don’t think this materially changes the prospect of a deal being reached before the end of the year”, Chris Graham (NYSE:GHM), Europe Economist at Standard Chartered (OTC:SCBFF), said.

He added his team was sticking to probabilities of a deal at 50%, no-deal at 30% and an extension of the talks to 20%.

Petr Krpata, Chief EMEA FX and IR Strategist at ING, also stuck to his overall forecast.

“Yes, the latest developments definitely increased the chance of a no-deal Brexit, but still no deal is not our base case,” he said, giving a 50% to 60% probability to a deal.

Economists at Commerzbank (DE:CBKG), Rabobank and Nomura also kept their forecasts that a deal was most likely scenario.

While there is an expectation that Prime Minister Boris Johnson will not go as far as to “eliminate the legal force of parts of the withdrawal agreement”, a possibility reported by the Financial Times, economists said they had to take that into account.

“While our base case remains a semi-managed hard exit (60% probability) which involves some modest stop-gap measures to manage the transition from EU to WTO rules for trade, the rising tensions could limit the breadth of any such measures,” said Kallum Pickering, a senior economist at Berenberg.

Moving forward however, the perception could quickly deteriorate if London and Brussels keep up their tug of war.

“It is almost inevitable that the perceived probability of ‘no deal’ will escalate over the coming weeks”, Goldman Sachs (NYSE:GS) analysts wrote in a research note this morning in which they maintained their expectations of “thin” free trade agreement.

GRAPHIC: Brexit brinkmanship – https://fingfx.thomsonreuters.com/gfx/mkt/ygdvzmedjpw/Pasted%20image%201599486191450.png

Economists stick to Brexit forecasts despite no-deal rhetoric

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

- Advertisement -

Latest article

Let’s talk, says Spain, as jailed Catalan separatists are pardoned

World5 minutes ago (Jun 22, 2021 01:37PM ET) 2/2 (C) Reuters. FILE PHOTO: A protester waves an Estelada (Catalan separatist flag) during a demonstration outside the...

U.S. Fed bank stress tests pave way for stock buyback, dividend bonanza

(C) Reuters. FILE PHOTO: A combination file photo shows Wells Fargo, Citibank, Morgan Stanley, JPMorgan Chase, Bank of America and Goldman Sachs from Reuters...

U.S. Senate confirms Biden intel pick after Republicans cite Huawei link

Stock Markets7 minutes ago (Jun 22, 2021 01:35PM ET) (C) Reuters. WASHINGTON (Reuters) - The U.S. Senate on Tuesday confirmed President Joe Biden's nominee Christopher...

Jet Airways shares more than halved since closure of operations in 2019

NEW DELHI: Shares of Jet Airways, whose likely revival is in sight with NCLT approving a resolution plan, have lost more than half of...

The 2 Best Pharma Stocks to Buy on Dips

Stock Markets12 minutes ago (Jun 22, 2021 01:30PM ET) (C) Reuters. The 2 Best Pharma Stocks to Buy on Dips The aging population in much of...