Katharina Utermöhl media comment – Brexit Transition



Katharina Utermöhl, European economist at Euler Hermes, the world’s leading trade credit insurer, said:


Signing a two-year transition agreement with the EU to take effect from March 2019 onwards will significantly soften the negative economic impact of exiting the EU. Real GDP will continue to grow at approximately 1 per cent in 2019 in real terms, a positive albeit relatively weak performance. However in a cliff-edge scenario we would have expected the UK economy to slip into recession in 2019 with GDP contracting by more than 1 per cent.
“Leaving with no trade agreement would have resulted in annual export losses of £30 billion for goods and £36 billion for services for the U.K. in 2019. In real terms, this would have produced a drop of 6 per cent for total exports on the previous year.
Our forecast rise in corporate insolvencies will soften to just three per cent in 2019 after increasing by five per cent and six per cent in 2017 and 2018 respectively. This is in contrast to the 15 per cent forecasted for 2019 should the UK leave the EU without a deal in place and having to trade on World Trade Organisation (WTO) terms.

By avoiding legal uncertainty and keeping trading arrangements with the EU largely unchanged, the UK economy will stay resilient. It will allow more time for negotiations for a positive outcome for the future UK-EU trade partnership as well as preparing the ground for free trade agreements with non-EU economies. 



Media contacts:

Euler Hermes PR contact
Adrian Russell
+44 (0)20 7860 2728

Public relations agency contact
Alastair Henry
+44 (0) 161 235 0320