With the passage of the Brexit bill opening the way for Prime Minister Theresa May to trigger formal negotiations for the UK’s exit from the European Union, Frontier Economics has published a compendium of bulletins exploring the choices and challenges now facing the UK and its European neighbours.
Brexit will profoundly alter the political and economic relationship between Britain and its continental neighbours. But for all the political turbulence, economic conditions look remarkably calm. Early fears that the referendum decision would push the UK into recession have not materialised. Instead, Britain’s output grew by 2% in 2016 – more than any other G7 economy. The outlook for Europe as a whole also remains broadly steady: unemployment is falling the EC expects the economies of all EU Member States to grow throughout the rolling three-year period for which it makes forecasts.
So were the economic fears overblown? Well, dig a little deeper, and the picture becomes less clear. Although the EC upgraded its growth forecasts for the euro area in February, it also warned of “choppy waters” and “higher-than-usual uncertainty” surrounding the economic outlook.
Over the past nine months Frontier has published a series of bulletins exploring the fundamental questions that Brexit poses for a range of industries – from financial services to fossil fuels, and from agriculture to aviation. It is striking just how many of these questions remain unanswered. The Prime Minister may have explicitly ruled out continued membership of the Single Market, but it remains to be seen what will come in its place.
With the UK government set to trigger Article 50 on 29 March, the hard negotiations now look set to begin in earnest – with just two years to reach a settlement that will affect almost all areas of the UK economy, as well as much of the EU. So now is a critical time to take stock of what we know – and do not know – so far. Drawing on Frontier’s experience in advising businesses, regulators and policymakers across a range of industries and European countries, the bulletins in the new compendium consider the risks and opportunities facing some of the sectors that will be most deeply affected by the outcomes of the negotiations.
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