Even as expectations that the UK will agree a deal with the EU increase, we are still hearing of more and more negative impacts of crashing out of the EU without one. Moody’s said there was a risk of recession and now the IMF has had their say. Lagarde said that a disorderly exit from the EU would have dire consequences, including reduced growth, an increase in the budget deficit and a depreciation of the pound.
Still, May appears to be confident she can secure a deal with the EU and is on a charm offensive over the Chequers plan. She insists this is still the best way to secure a deal, with the alternative being a no-deal Brexit. As the deadline approaches, it is vital that something is agreed, but the government can’t appear to agree what the best way forward is.
Today is another quiet day for UK economic data, but tomorrow promises to be much busier, with the retail price index and inflation rate for August on Wednesday’s schedule. Analysts are forecasting that inflation will fall to 2.4% from 2.5% in the previous month. If that proves to be the case, it will show that the gap between wage growth and inflation is widening.