Today’s circus act is a load of Brexit analysis that doesn’t count for anything
Today we find out the cost of Brexit as the UK government and BOE release analsys on the subject. The Treasury is publishing their forecasts for the different Brexit scenarios and the BOE releases its latest Financial Stability Report, which will also include Brexit coverage.
There’s just one problem (as highlighted by ITV’s Robert Peston). The Treasury analysis is based on the old Chequers model, which has mostly been kicked into touch for the mutated Brexit deal we’ve got on the table now, and that was agreed by Europe this past weekend. Unless the scribes have done a last minute re-jig, it’s going to be mostly redundant. The only part that might still hold water is the analysis on the no deal scenario.
What the BOE comes out with is anyone’s guess too but they will have a range of views up and down the positive/negative scale.
There doesn’t seem to be one ounce of positivity towards Brexit right now so expect the main focus to be on how big the risks are. That’s what the BOE is going to concentrate on and that’s what the market is going to concentrate on. I don’t expect it too be too market moving because you don’t have to be Einstein to work out that a no Brexit deal is bad. What counts is how bad either the government or the BOE paint the actual Brexit deal. The FSB and Treasury work in tandem so they’ll be comparing notes for the analysis.
One thing to watch from the Treasury, and that’s how they spin things. Being the government, they’re likely to spin the bad stuff as “unlikely”, “worst case”, and “not expected to happen” type language, which will, of course, fool no one.
I believe it’s all coming out in one hit at 16.30 GMT and then we’ll get BOE’s Carney holding a presser on it at 16.45 GMT.
I, for one, can’t wait 😉
We’ll post the live link later in the day.