Page 5 - ISQ UK JANUARY 2020

JANUARY 2020

2020 UK Outlook:

After the Election, What Next?

Chris Bailey, European Strategist, Raymond James Investment Services Ltd.

After the dust has fallen on the first December election in
nearly a century, what should we anticipate next for both Business Optimism
the UK economy and the financial markets in 2020?
% of CFOs who are more optimistic about the financial
At the time of this writing, the UK still remains a member of the prospects for their company than three months ago
European Union. However, it is reasonable to assume that this
will not be the case for much longer, following the result of the
mid-December general election. However - as is the nature of 60
modern-day trade deals - this simply marks the end of the 40
beginning for the Brexit debate. Many additional months of
negotiation will be required to finalize the regulations and rules 20
associated with the divorce. Early indications by the newly 0
elected government suggest they see the end of 2020 as a time -20
limit for these discussions in order to completely ‘take back -40
control’. Such a timetable though could plausibly create
another one of the ‘cliff edge’ moments - which have populated -60
the Brexit debate over recent years - given the complexity of -80
forging such a trade deal. This is especially true that all this will 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
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be happening at a time when other bilateral deals - with other
important trading partners or economic blocs - may also being Source: Deloitte CFO Survey
considered or drawn up.
Such fears are maybe why turn-of-the-year economic growth
projections are not rampant, with a survey by one leading or no improvement’ in 2020 compared to 2019. Given the
financial newspaper concluding that a majority of economists relative dullness of likely full year 2019 eventual out-turn of
they polled predicted that UK economic growth will show ‘little around a 1.2 percent economic growth level, a continuation of
this level of performance would be disappointing.
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