United Kingdom Country Risk Report


    Updated July 2016 with BMI’s revised post-Brexit forecasts, updated core views and full analysis of the impact of Brexit on the UK. The report provides comprehensive data and in-depth analysis of political, financial and economic risk.

    Why you should buy this report

    • Understand and measure the political, business environment and operational risks to your company in post-Brexit United Kingdom
    • Gain insight on emerging trends that could support, strengthen or disrupt your activities in the market
    • Benefit from 10-year macroeconomic forecasts and insight into the structural characteristics of the economy
    • Get the long-term political outlook and explore possible scenarios for change in the post-Brexit United Kingdom

Providing comprehensive data and in-depth analysis of political, financial and economic risk.

Report includes: BMI's Core Views, 10-year Forecasts, BMI's Economic Risk Index, Political Stability and Risk Index, Long-term Political Outlook, Operational Risk Index, SWOT Analysis and Structural Economic Sections

Why you should buy this report

  • Understand and measure the political, business environment and operational risks to your company
  • Gain insight on emerging trends that could support, strengthen or disrupt your activities in the market
  • Benefit from 10-year macroeconomic forecasts and insight into the structural characteristics of the economy
  • Get the long-term political outlook and explore possible scenarios for change
×

Sign up to download the United Kingdom Country Risk Report

By submitting this form you are acknowledging that you have read and understood our Privacy Policy.

Thank you for your interest

You will shortly receive your free executive summary by email.

United Kingdom Country Risk Report
Product Price
$1,195.00

Core Views

  • Brexit will weigh heavily on UK growth, predominantly in H216 and H117 when uncertainty over the UK's future relationship with the EU is at its highest. We have revised down our real GDP growth forecasts for 2016 and 2017 to 1.4% and 0.2% respectively, from 1.8% and 2.2% previously.

  • The Bank of England (BoE) will ease monetary policy in light of the British vote to leave the EU on June 23, with an interest rate cut and resumption of quantitative now expected in H216. However, with interest rates already at record lows and inflation poised to rise on the back of pound depreciation, monetary stimulus will have little beneficial impact on the real economy.

  • While there remains considerable uncertainty as to the makeup and policy direction of the next UK government, we expect a relaxation of deficit reduction targets in light of a slowing economy.

  • In light of positive structural economic reforms undertaken by the government, coupled with flexible monetary and exchange rate policies, we remain bullish on the long-term economic prospects for the UK relative over the longer term.

  • Outgoing Prime Minister David Cameron is aiming to put UK politics into a holding pattern until October. By delaying the start of EU exit negotiations until his successor is in place this is aimed at preventing knee-jerk political reactions amid a very fractious political climate.

Major Forecast Changes.

  • We have revised down our real GDP growth forecast in 2016 and 2017 to 1.4% and 0.2%, from 1.8% and 2.2% previously.

  • We now forecast the current account deficit to narrow to 2.9% of GDP by 2018, from 4.1% previously.

  • We now forecast the first rate hike only in 2019, from late-2017 previously, and expect the BoE to resume quantitative easing (QE) by the end of this year.

  • We forecast the fiscal deficit to remain around 4.0% of GDP in 2016-2018, from a previous forecast for fairly aggressive consolidation.

Key Risks

  • Downside Risks To Medium-Term Growth: There are downside risks to our economic growth forecasts, particularly stemming from the impact of fiscal consolidation, persistent weakness in the eurozone economy, and ongoing headwinds facing global emerging markets.

Macroeconomic Forecasts (United Kingdom 2014-2017)
Indicator 2014 2015e 2016f 2017f
e/f = BMI estimate/forecast; Source: BMI/ONS
Real GDP growth, % y-o-y 2.9 2.3 1.4 0.2
Nominal GDP, USDbn 2,991.8 2,848.5 2,483.6 2,566.4
Consumer price inflation, % y-o-y, eop 0.5 0.2 1.0 2.8
Exchange rate GBP/USD, eop 0.64 0.68 0.77 0.75
Budget balance, % of GDP -5.6 -4.4 -4.2 -4.0
Current account balance, % of GDP -4.7 -5.4 -4.6 -3.6
Executive Summary
5
Core Views
5
Major Forecast Changes
5
Key Risks
5
Chapter 1: Economic Outlook
7
SWOT Analysis
7
BMI Economic Risk Index
7
Economic Growth Outlook
8
Technical Recession Imminent But Long-Term Forecasts Intact
8
GDP By Expenditure Outlook
10
TABLE: GDP GROWTH FORECASTS
10
TABLE: PRIVATE CONSUMPTION FORECASTS
10
TABLE: GOVERNMENT CONSUMPTION FORECASTS
10
Monetary Policy
11
Monetary Easing Coming, But To Little Effect
11
TABLE: FIXED INVESTMENT FORECASTS
11
TABLE: NET EXPORTS FORECASTS
11
Monetary Policy Framework
13
TABLE: MONETARY POLICY FORECASTS
13
Fiscal Policy And Public Debt Outlook
14
Austerity Drive To Lose Momentum
14
Structural Fiscal Position
15
TABLE: MAIN REVENUE & EXPENDITURE CATEGORIES
15
TABLE: FISCAL & PUBLIC DEBT FORECASTS
15
External Trade And Investment Outlook
16
Trade Deficit With EU Gives Leverage
16
Outlook On External Position
17
TABLE: CURRENT ACCOUNT BALANCE FORECASTS
18
TABLE: CAPITAL & FINANCIAL ACCOUNT BALANCE
19
Currency Forecast
20
GBP: Oversold And Undervalued But Outlook Still Neutral
20
TABLE: EXPORTS BREAKDOWN BY CATEGORY AND DESTINATION (2015)
20
TABLE: IMPORTS BREAKDOWN BY CATEGORY AND SOURCE (2015)
20
TABLE: BMI CURRENCY FORECAST
21
Brexit: The Upside Scenario
22
Potential Benefits From Leaving The EU
22
Regional Economic Activity
24
Brexit Contagion Could Reignite Eurozone Crisis
24
Chapter 2: Political Outlook
27
SWOT Analysis
27
BMI Political Risk Index
27
Domestic Politics I
28
Politics Entering A Holding Pattern
28
Domestic Politics II
30
What Is Brexit-
30
Domestic Politics III
31
A Disunited Kingdom: Scotland To Hold Indyref2-
31
Domestic Politics IV
33
EU Hardline Brexit Rhetoric To Soften
33
Chapter 3: Operational Risk
37
SWOT Analysis
37
Operational Risk Index
37
Operational Risk
38
Labour Market Risk
38
TABLE: DEVELOPED STATES - LABOUR MARKET RISK
38
Logistics Risk
41
TABLE: DEVELOPED STATES - LOGISTICS RISK
42
Crime And Security Risk
44
TABLE: DEVELOPED STATES - CRIME AND SECURITY RISK
45
Trade And Investment Risk
46
TABLE: DEVELOPED STATES - TRADE AND INVESTMENT RISK
47
Chapter 4:BMI Global Macro Outlook
49
Global Macro Outlook
49
Brexit Risk Casts A Long Shadow
49
TABLE: GLOBAL ASSUMPTIONS
49
TABLE: DEVELOPED STATES, REAL GDP GROWTH, %
50
TABLE: EMERGING MARKETS, REAL GDP GROWTH, %
51
MACROECONOMIC FORECAST
53
TABLE: UNITED KINGDOM - MACROECONOMIC DATA & FORECASTS
53

Assess your risk exposure in United Kingdom with our 100% independent forecasts assessing the pace and stability of this key market. Backed by trusted data from BMI Research's 52 million data point economic forecast model, this report will allow you to measure political, economic, business environment and operational risks in United Kingdom with confidence.

Your subscription service includes:

  • Delivery of the report in print and PDF
  • Online access for 12 months
  • The functionality to translate your online report into your choice of 10 languages - Arabic, Chinese, French, German, Italian, Japanese, Korean, Portuguese, Russian and Spanish
  • The ability to export data and graphs from the online report directly into your workflow
  • The support of a dedicated Account Manager to answer any questions you might have about your subscription
  • Access to our team of leading analysts who will be happy to answer any questions you might have about the data and forecasts included in this report