The latest Reuters poll of economists and foreign exchange strategists showed that the chances of a ‘no Brexit deal’ have increased, which is likely to further weigh on an already weak pound.
Key Findings:
“On Sunday trade minister Liam Fox put the odds of such an outcome at 60-40.
But economists were far less pessimistic, giving a median 25 percent chance no agreement was reached. That was, however, higher than the 20 percent in a July poll.
A dozen of 27 common contributors between that poll and this upped their forecast. Thirteen left them unchanged and two cut them.
80 percent of economists said the most likely outcome will be the two sides agreeing on an EU-UK free trade deal, as has been predicted since Reuters first began polling on this in late 2016.
But in an upgraded second place was leaving without an agreement and trading under basic World Trade Organization rules.
Slipping to third place, according to those polled, was the scenario where Britain would belong to the European Economic Area, paying to maintain full access to the EU’s single market.
Once again, their least probable scenario was a decision to reverse Brexit.
In one month, Cable will be stronger at $1.31 and then at 1.34 by end-January – just two months before Britain is due to leave the EU – the poll forecast.
By end-July next year, it suggested, sterling will have rallied to $1.38, probably supported by an expected rate hike from the Bank of England.”
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