UK: Breaking up is hard to do – Standard Chartered

Sarah Hewin, Chief Economist at Standard Chartered, explains that as the UK approaches two years of negotiation with the EU over Brexit, the outcome is unpredictable.

Key Quotes

“The two sides have different views about the sequencing of talks, and negotiators could quickly run into an impasse over the cost of the ‘divorce settlement’. The UK hopes for swift agreement on a free trade deal, while the EU expects this process to be lengthy.” 

“Even if the Brexit terms can be agreed in principle, the two sides may not see eye to eye on the terms for a transition period or ‘implementation phase’ between the end of the UK’s EU membership and the start of a free trade agreement (FTA). The EU is unlikely to grant ongoing access to the single market without adherence to EU rules, while the UK wants to throw off the ‘shackles’ of the European Court of Justice (ECJ) and halt free movement of labour.”

“In addition to navigating EU-27 demands, UK negotiators will likely face challenges on the home front, including the passage of the Great Repeal Bill, the situation of Northern Ireland and Scotland, and economic developments as growth momentum slows and inflation accelerates.”