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Brexit risks: weakening euro area growth and populism surging – Nomura

Analysts at Nomura explained that when the Brexit vote happened, we said that the best thing to happen from the UK’s perspective would be for populism to diminish and euro area growth to improve.  

Key Quotes:

“This would mean less incentive for the EU to ‘punish’ the UK to discourage other countries from thinking about going down the same route. Through much of 2017 this was exactly the narrative.”

“However, in 2018 there has been weakening euro area growth and populism has been surging.”

“These are the conditions which might convince centrist parties in the EU-27 (which still hold power in most countries) to be less flexible to the UK.”

“Given the difficulties for the UK in compromising further from its current plan, this could add to volatility over coming months and indeed into the transition period if these characteristics persist.”

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