Brexit deal or no Brexit deal, the UK faces a rocky few months as businesses, left dangling until the last minute, find out what kind of relationship the UK is going to have with the EU from 1 January.
All eyes are on the last-minute talks between Boris Johnson’s team at No 10 and their counterparts in Brussels. Not much else matters ahead of the climax on Sunday.
Looking back to October, as the Office for National Statistics does in its assessment of national income, or gross domestic product (GDP), feels like shining a light on a period of relative calm, albeit one where the warning signs were flashing red again.
The month-on-month figure showed that GDP increased by just 0.4% to give a quarterly rise of 10.2%.
While the manufacturing and construction sectors barrelled along, increasing output by 1.7% and 1% respectively, the services sector slumped back to register a tiny 0.2% increase.
It shows that Britons were expecting a second lockdown in November and had already begun to limit their journeys, visits to attractions and spending in the shops.
“Rishi’s dinners”, the chancellor’s notorious “eat out to help out” subsidy that spurred the restaurant trade in August, and possibly the virus as well, had run its course and most families were beginning to hunker down again.
Government restrictions also played a major role following the introduction of regional rules in three tiers that placed much of the north under the most severe clampdown.
The lockdown month of November is expected to register a fall in GDP, while December’s output – labouring under the twin restrictions of Covid rules, cargo jams at UK ports and heightened Brexit uncertainty – is likely to end the year on a sour note.
Most City analysts have forecast a drop in GDP over the last quarter of the year to leave the economy about 8% short of where it was at the end of last year.
Not only is this the worst economic slump in 300 years, it is the worst possible platform for the prime minister to plunge the UK into a destabilising last-ditch battle with the EU.
It’s almost like watching the “chickie run” scene in the film Rebel Without a Cause that pits the James Dean character, Jim Stark, against his rival Buzz Gunderson in a car race to a seaside cliff-edge.
Buzz dies after his jacket sleeve becomes entangled in his car door and his attempt to bail out fails. Let’s hope the UK’s representatives in the Brexit talks have planned their negotiating strategies with greater diligence.
A bungled no-deal Brexit would put the UK on course for a second quarter of negative growth and a second recession in little over a year.
The Organisation for Economic Co-operation and Development said earlier this month that the UK will lag behind every other major economy apart from Argentina. The Resolution Foundation thinktank said last month Britain was on course for one of the worst periods of income growth since records began in 1955.
Even a deal is likely to leave many questions unanswered, keeping Britain’s place near the bottom of the international league for some time yet.
