1. UK Economic Outlook: Covid-19 leaves inflation in its wake

Abstract

There has been a significant improvement in the UK’s net trade performance with the European Union (EU) since the 2016 Brexit vote. The previous negative trend in the real net trade balance with EU has not only stopped but is improving. The gap between recent numbers and the previous trend in the trade balance with the EU is equivalent to just over 2 per cent of GDP. A plausible reason for these developments is that the Brexit vote led to a sharp sterling depreciation, making the UK significantly more competitive while crimping domestic demand. However, Covid-19 and a dramatic drop in the EU’s overall trade balance are also likely important influences. when searching for due