This from the latest PIMCo outlook for the UK
- We see nominal GDP growth in 2019 in line with consensus but expect a more favorable split between real output growth and inflation.
- Our forecast of real GDP growth in a range of 1.25% to 1.75% is based on our expectation that a chaotic no-deal Brexit will be avoided as there will either be a deal on a transition agreement that will be accepted by U.K. Parliament or an extended stop-the-clock negotiation period.
- Our below-consensus inflation forecast sees inflation coming back to the 2% target over the course of next year as import price pressures fade and weak wage growth keeps service sector inflation subdued.
- Against this backdrop, we see one to two additional rate hikes from the Bank of England over the next year.
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Avoiding a chaotic no-deal Brexit is becoming a more popular take, as is the next step being a likely delay to the dropdead date of March 29, can to be kicked into July (disclosure I am ALWAYS long can kicks)
