The vote on the Brexit deal in the UK Parliament, initially planned for 11 December has been rescheduled to 15 January. The purpose is to secure a positive outcome on the deal. Based on the results of the confidence vote that PM May survived on 13 December we can conclude that 117 Tory MPs may vote against the deal. The higher and prolonged uncertainty will bring GDP growth down to a meager +0.3% q/q in Q4 and Q1 on the back of “on hold” investment decisions from companies and sluggish consumer spending as the GBP will continue to suffer before rebounding to 1.15-1.20 against the EUR once the deal has passed the EU Parliament (our baseline scenario) and fears of a “Hard Brexit” or another referendum or early elections have vanished. Should the deal be rejected by the Parliament on 14 January, another vote could be planned 21 days later before a vote in the EU Parliament can take place on 11-14 February or 11-14 March. A last resort solution would be the extension of Art. 50 to later than 29 March 2019.
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Weekly Export Risk Outlook 20 December 2018