They saw euro zone growth slowing to 0.3 per cent in the final three months of the year from 0.4 per cent in the third quarter, while the outlook for the medium term depended on how fast European Union leaders struck a deal with Britain. It reported weaker-than-expected sales in the three months to July 2 but said it was too early to quantify the Brexit effect.
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The damage can be mitigated if politicians move swiftly to end uncertainty around the UK’s next moves, Moscovici added.
“Brexit has brought to the fore the main obstacle to sustainable growth in the euro zone: a definitive clean-up of Italian banks’ balance sheet”, said Frederik Ducrozet, an economist at wealth management firm Pictet in Geneva.
There are also questions as to the negotiating position of the United Kingdom after the triggering of Article 50, what happens if an agreement is not reached within the two-year limit, or the “emerging reality” that Article 50 negotiations will deal only with how the United Kingdom leaves the bloc, rather than any future economic relationships.
“We expect the increased uncertainty to reduce UK GDP by 1 to 2½ percentage points by 2017 compared to the baseline scenario of remaining”. Lawmakers should be allowed a free vote on an Act of Parliament before Article 50 of the Lisbon Treaty can be triggered and the two-year timeline to Britain’s exit formally starts, they said.
Moscovici told CNBC that the revisions were not a fait accompli but a first analysis of the current situation. “And I think it’s mainly in the British interest to get clarity soon, so don’t postpone the negotiations endlessly”.
The authors conclude that a British exit will carry “large economic and political costs”, adding, “It is evident that none of the alternative relations with the European Union presents itself as more advantageous compared to European Union membership”.
Speaking before Andrea Leadsom stood down and left her the only remaining candidate to become the Prime Minister, Home Secretary Theresa May launched her national campaign at a press conference in Birmingham.
Major investment banks including Goldman Sachs and JPMorgan said they would work to help London remain a top centre for global finance, and a big source of tax revenue for the government.
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And after all major male pro-Brexit politicians had resigned or been forced out of the Conservative leadership race, commentators from continental Europe could hardly hide their “schadenfreude”. “So yes in that respect the nomination of Theresa May [could] be good news for the process itself”. BA.com suggests a third more USA citizens are looking for flights to the UK.
