Following the UK Government, BoE also released it’s economic analysis of different Brexit scenarios.
In short, in case of economic partnership with EU after Brexit, and relative to November Inflation Report (IR), by end of 2023:
- GDP is 1.75% higher in the close partnership scenario
- GDP is -0.75% lower in the less close partnership scenario
- Unemployment rate will be at 4%, slightly lower than the IR
- Inflation is a little lower reflecting appreciation of Sterling and peat at 2.25%
In case of no deal, no transition, relative to November IR, by the end of 2023, in worst case:
- GDP is -4.75 to -7.75% lower
- Unemployment rate will jump to 5.75-7.50%
- Inflation will peak at 4.25 to 6.25%
