Ahead of the Bank of England’s monetary policy report, more than 200 businesses in the South packed out Southampton’s Chilworth Manor last week to find out from one of the UK’s leading economists what Brexit could mean for them.
Mark Berrisford-Smith, Head of Economics at HSBC, gave his presentation at a special seminar organised by the bank and Rothmans.
The audience heard that discussions on exit options will dominate the government’s agenda for the next two years. Options include a ‘soft exit’, as in Norway, or a ‘hard exit’, with membership of the World Trade Organisation becoming a necessity, or the European Free Trade Association.
He told delegates that we could see exchange rates of around £1.20 to the dollar and 92 pence to the Euro by the end of this year, accompanied by 1.25% inflation, and 4% inflation by the end of next year, as import costs increased and consumer spending slows down.
The outlook for 2018 was better as decisions on exit become clearer, he predicted, and he believed that 2020 would be timely for EU exit as this would coincide with the end of the current seven-year rolling EU budget programme and would give the UK several years to put plans in place.