UK ‘likely’ to enter recession in no-deal Brexit, Moody’s warns (The FT)

  • Moody’s has reiterated its warnings over the economic impact of a no-deal Brexit, and believes the UK “would likely enter a recession” if it crashes out of the EU.
  • Moody’s has previously claimed that the UK would risk a recession with a no-deal exit.
  • Today, it said the UK’s Aa2 rating would “come under downward pressure” if the economic impact of Brexit is more severe than it currently expects, such as in a no-deal scenario.
  • In its annual credit analysis of the UK, Moody’s stated: “such an outcome would be very disruptive to current UK-EU trading arrangements and have a material, negative impact on the UK economy and on the economies of certain EU member states”.

Chancellor Philip Hammond vows to oppose ‘£90bn no-deal hit’ (BBC)

  • Chancellor Philip Hammond has indicated that he would be prepared to vote against a no-deal Brexit in Parliament, claiming it could cost the UK up to £90bn.
  • Leaving the EU without a legal agreement would be the “wrong” policy and cause a huge “hit” to the public finances, he told MPs.
  • He said it was “highly unlikely” he would still be in his job after Theresa May stands down next month.

Bank of England governor acknowledges divergence in BoE and market rate forecasts (The FT)

  • Brexit-related uncertainty has led to a growing disconnect between market expectations of interest rates and the Bank of England’s guidance, Mark Carney acknowledged on Tuesday.
  • Until the start of 2019, the UK economy had been growing at around its trend rate, but in the first half of 2019 it had been running below potential, relying heavily on resilient consumer spending to offset a slump in business investment, Carney told an audience in Bournemouth.
  • The latest data suggested stagnant output, partly due to the distortions created by Brexit-related stockbuilding and factory shutdowns, but with signs that weaker world growth was
Author

Jessica's practice focuses on international trade and anti-bribery work, encompassing customs, export control and sanctions matters. Jessica's trade work includes advising international clients on fast-moving and evolving EU and UN sanctions, notably in respect of Iran and Russia, and on compliance with UK and EU export controls. Her trade experience also includes advising on tariff classification and customs valuations. Jessica's anti-bribery experience includes assisting with investigations, and advising clients on compliance with anti-bribery laws. Jessica has also taken a lead role in monitoring Brexit-related developments; analysing how they will affect the UK's trading position generally, and clients' businesses specifically. She has helped clients begin to conduct risk assessments of how Brexit will impact their businesses, and has assisted them in developing tailored Brexit strategies. Jessica also presents at various seminars, webinars, and conferences on the complexities of Brexit. Jessica advises global clients on complex issues arising from international transactions and works with clients across a number of sectors including pharmaceuticals, defence, finance, aviation, energy, and telecommunications. Jessica has also worked previously in Paris, and is fluent in French.

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