PM Boris Johnson managed to get a majority on his Brexit deal on 22 October. However, as expected, he didn’t get support for a fast ratification process allowing the UK to leave on 31 October, calling for a technical extension until 31 January 2020, that EU heads of state are expected to grant shortly (maybe under some conditions). The next steps for us continue to be general elections by year-end (possibly accompanied by a second referendum). The Brexit bill will soon be sent to the House of Lords which is likely to ask for a series of amendments as 85% of them are pro-EU. While the Brexit uncertainty is a bit lower, the probability of views switching in the opposite direction after the elections is not negligible. Moreover, the targeted FTA (UK out of the EU Single Market, zero tariffs on goods and no more passporting rights for the services sector) and the feasibility of the proposed dual customs union system for Northern Ireland remain big question marks. We expect UK real GDP to increase by +0.8% in 2020, at best.
