Top economist welcomes move on Brexit impasse

A top economist has welcomed this morning’ breakthrough in the political impasse over Brexit negotiations and the Northern Ireland border which have been worrying the business community.

Dean Turner, the UK economist at UBS Wealth Management, on a visit to the North West told TheBusinessDesk he always believed ultimately “the economy would be prioritised”.

He said: “I think you’ve still got to stick to that belief that form of words which satisfies the requirement for sufficient progress, and this has proved to be the case. As we know in politics, where there’s a will there’s way.”

Prime Minister Theresa May arrived in Brussels today (Friday, December 8) following overnight talks on the issue of the Irish border.

The PM said there would be no hard border and the Good Friday Agreement would be upheld.

EU citizens in the UK “will be able to go on living as before”.

Turner continued: “This morning’s announcement is in line with our base case that the talks will move to phase two after next week’s European Council meeting.

“It is still not a done deal, as the 27 heads of governments still need to formally approve the recommendation.

“Moreover, elements of the Conservative Party will be scrutinising what has been offered to move the talks forward.

“However, the risks that we don’t see approval next week are minimal, in my view, as all sides will have their eyes on the bigger prize.

“The announcement should partially lift the cloud of uncertainty hanging over the UK, and it probably strengthens the PM’s position, reducing the (already low) possibility of an election in the next twelve months.”

Turner went on to predict a year of robust growth in 2018, with net exports impacting positively on the UK economy.

He said: “There are two reasons for this, firstly the weaker pound and the fact that demand for UK exports remains solid.”

He also said that a slowdown in growth this year had been caused by a lack of business investment “dragging” household incomes which impacting on spending.

But he said this would improve after inflation peaks within the next two months.

“Year on year rates of wage growth are running at about 2% which is not a great number,” said Turner. “In some sectors we’re seeing wage growth over 3%.

“If that continues, and given how tight the labour market is right now, there’s every chance it could do. Could see some easing of the public sector pay cap.”