Bill Diviney, senior economist at ABN AMRO, suggests that cutting through the noise of the many recent developments in the UK, by far the most important for the economic outlook has been the significant fall in the chance of a no-deal, disorderly Brexit.

“This occurred because of two things: first, the so-called ‘Benn’ Act which forced the government to request a delay to Brexit at the end of October. Second, PM Johnson managed to secure a deal that his hard Brexit cabinet could support. This has narrowed the likely outcomes of the looming election to Johnson’s new deal on one side, and a soft Brexit or Remain outcome on the other side. While risks remain, the tail risk of a disorderly Brexit is significantly lower. In this note, we will explore the likelihood of each of these outcomes, and the implications for the UK economic outlook.”