Brexit: A blind date is better than a bad breakup

• The cost of uncertainty regarding Brexit could be as much as -0.1pp of GDP growth per quarter between now and making a deal
• Euler Hermes still expect a ‘Blind Brexit’ (70% likelihood): a last-minute deal with the EU  where both sides agree on a Free Trade Agreement with very close ties
• In a ‘No deal’ scenario (25% likelihood), the UK will exit the EU under the WTO conditions: 4% to 5% of mutual import tariffs, with heavy consequences on both sides

On July 26th, the EU rejected the Brexit deal proposed by the UK (the Chequers plan). In response to the rejection of this proposal, the EU proposed two solutions: (i) a Norway type of agreement or (ii) a Comprehensive Economic and Trade Agreement (CETA) type of agreement – with EU membership for Northern Ireland. For the moment, the UK rejected both proposals. Importantly, we cannot exclude the risk of early elections before March 2019.

In light of recent events, Euler Hermes publishes today a new study analyzing the likelihood of a ‘no deal’.

Read the full report here: Brexit: A blind date is better than a bad breakup