- Poll of Economists shows Brexit’s cancellation is looking increasingly likely
- Economists expect the Bank of England to delay decisions when it will increase interest rates
- European Union postpones Brexit to avert the British leaving suddenly
After a poll conducted with 75 Economists, a majority believes that the probability of Brexit being cancelled and an orderly deal be made later is higher than the British leaving the European Union (EU) without a deal. Their expectations as to when the Bank of England will increase interest rates has also extended, reports Reuters on April 18.
Economists increasingly confident that Brexit will be cancelled
Per the report, a good number of Economists who partook in Reuters’ recent poll are of the opinion that Brexit is more likely to be cancelled with a deal made later in comparison to the British leaving the EU without a deal.
It is also worthy to note that the recent result which shows either side will settle on a free-trade deal corresponds with the opinion of other Economists garnered from all Reuters polls conducted since late 2016.
Lowest percentage since Reuters began its polls in July 2017
The percentage of economists who believe a no deal Brexit is likely is the lowest since the media began running its poll in July 2017.
An Economist at BNP Paribas, a French international banking group who made comments outlined that even though it is now less likely for a Brexit without a deal being made, it just leaves more uncertainties about the future:
“A deal (and likely a softer Brexit) still seems more likely than not…But we are skeptical that this will happen any time soon.”
There were also disparities in the current poll in comparison with that of March and an instance is the case where the probability for Brexit to be canceled came in third place instead of the fourth position it was previously ranked.
Likewise, the British leaving without an agreement being made and also trading under the rules of the World Trade Organization moved from third place to fourth this month.
Despite these changes, the probability for Britain to become a member of the European Economic Area and pay to the EU’s budget in a bid to maintain its access to the EU’s single market still came in second place as was the case last month.
Economists do not expect bank rate to be moved from 0.75 percent
Other results from the survey show that none of the respondents expects the interest rate to be moved from 0.75 percent when the Bank of England’s Monetary Policy Committee (MPC) publicizes its decision next month.
Elizabeth Martins at HSBC said:
“Without Brexit uncertainty, the Bank of England might have considered raising interest rates at the May 2 inflation report meeting. With the country still in limbo politically, this is highly unlikely”
Generally, there is the expectation from Economists that the first rate increase of 25 basis points will happen later than was predicted. It will be in early next year and when that happens the Bank Rate will be fixed at 1.00 percent throughout 2020.
E.U. postponed Brexit to avert No Deal tragedy
Prior to this time, the EU agreed to postpone Brexit to October’s end in a bid to avert the risk of the British departing all of a sudden which investors and policymakers believe could have a significant impact on both economies.
Blockchain Reporter on April 17 had also informed that the Scottish and British economy could suffer immensely if there is a no-deal Brexit.