UK: GBP and fiscal are key growth risks - BNPP

In the UK, analysts at BNP Paribas are looking for 1.1% GDP growth in 2017 and suggests that this number could be topped if the weakness in the pound also benefits services sector exports, as they assume that exports are mainly boosted through the goods channel.

Key Quotes

“On the other side, we have assumed that the government’s fiscal consolidation plan is too ambitious next year and we expect the actual reduction in the deficit to be smaller than planned. If the government were to make good on its plans, this would lean down on our growth forecast.”

“Turning to Brexit, the timetable to trigger Article 50 in March 2017 looks broadly on track, though some slippage is possible. A wild card here is that some aspect of the UK’s exit could be referred to the European Court of Justice. This may even come from outside the UK, which is a case being planned in Irish courts.”