Han de Jong, chief economist at ABN AMRO, points out that the Conservative Party won a significant overall majority in the UK’s general elections.
“For those who had hoped for a second referendum and for the UK eventually staying in the EU the outcome is a disappointment. At least it creates clarity: Brexit means Brexit. Boris Johnson will take the UK out of the EU. Presumably, the UK will officially leave at the end of January, or possibly sooner. The actual date will not matter very much as there will be a transition period in which nothing will change from a practical point of view.”
“The transition period ends at the end of 2020 according to the Withdrawal Agreement, but can be extended. During the transition period the details of the new economic relationship of the UK with the EU will be negotiated. A one year period for a comprehensive agreement looks tight. As it is in nobody’s interest to let the UK crash out without a new deal, we must assume that the transition period will be extended if needed.”
“An interesting aspect of the election result is that the Prime Minister has such a large majority he does not rely on the hardest Brexiteers. There is, thus, a chance, that the new arrangement will actually constitute a relatively soft Brexit. It is time for the PM to listen to the business community. The big unknown here is that there are many new Tory MPs and they are an unknown quantity.”
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