Regardless of what happens with Brexit between now and 31st October, the recent weakening in both the global and domestic data has led us to revise down our GDP growth forecasts in all three of our scenarios based on different Brexit outcomes (a deal, a no deal and repeated delays). Only in the deal scenario are interest rates raised. Only in a no deal scenario is there a recession. But we think that interest rates would be cut in two scenarios – if there is a no deal and if there are another one or two delays to Brexit. Meanwhile, if there were a general election before Brexit, the economy might have to cope with either a no deal Brexit or the potentially business-unfriendly policies of a Labour government.
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