A bitter New Year’s Eve for the United Kingdom

Probable contraction of -2.5% in Q4. Increasing economic risks at the beginning of 2021. Limited
room for manoeuvre for the BoE. Weak pound sterling. FTSE 100 trading at 17% discount.

Key Points

• A few more days to avoid a disastrous no-deal
  Brexit for the British
• Temporary rebound in GDP in Q3
• Probable contraction of -2.5% of the economy in
  Q4
• Confidence once again at an all-time low
• Leading indicators somewhat more circumspect
• BoE to increase its asset purchase programme
  rather than introduce negative rates
• Slight rise in long-term rates
• Likely return of pressure on the pound sterling
• Short-lived catch-up of British equities?

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