UK Latest: Economists Say Brexit Deal Could Spur Growth

What sort of boost then are economists talking about the UK economy getting if we get this? Because on the one hand this might seem quite niche, you know it isn't about necessarily the whole UK, it's about Northern Ireland and the protocol there, but it sets a very different tone what we've been hearing recently. Well the point is that a deal could potentially reduce uncertainty which would add to business investment and boost growth. So Callum Pickering at Berenberg has said that since the pandemic businesses have built up a cash war chest of about £100 billion that they're not investing potentially perhaps because of the constant threat of a trade war with Brussels so if you get rid of that it would help to unlock the investment. I also spoke to JP Morgan Asset Management's Karen Ward yesterday who is an economic advisor to the Chancellor. She said that a boost to business investment would be significant and actually it's the secret source that would help to unlock higher productivity and higher real wages. The fact that she's on a constant contact basis with the Chancellor shows he's cognizant of these economic benefits of a potential deal. I would say that Brexit affects the UK economy also via the labour market and trade and business investment of course is also impacted by things like the tax environment but if Jeremy Hunt could boost growth he'd have more room potentially for the tax cuts that so many in his party want.

And I suppose if you get a deal changes the mood as you like as you say reduces uncertainty means less chance of a bigger fallout with the EU over trade. What about where we go from here then? What happens next Lizzie? Well we heard from Rishi Sunak in Prime Minister's questions yesterday in Parliament and it's clear that he stuck between on the one hand the Unionists in Northern Ireland and the Tory Brexitors and on the other the red lines of Brussels. What he suggested was that any deal would need legal changes to the existing Northern Ireland protocol to address this so-called democratic deficit but as we've heard from Marošević the European Commission Vice President renegotiating the protocol is unrealistic. So now the expectation is for a deal next week but really what everyone wants to see is the deal. There's frustration that the strategy seems to be that Rishi Sunak wants to get a deal to a stage that it's agreeable to the European research group of Brexiter MPs and the DUP before he puts his cards on the table but he risks humiliation in Parliament if he relies on the opposition votes to get it through folds too early and that seems to be the position that the opposition is trying to coax him into.

Bloomberg