, 8 tweets, 2 min read Read on Twitter
Economists at world’s biggest banks now scoping out fiscal/economic/ sterling/ market response to a snap General election...

eg Citi, a surprise to some, say base case for Johnson win now No Deal, Corbyn now second ref & remain, and have GDP 1.5-2% higher under Corbyn-led Govt:
... three assumptions underpinning that Citi assessment...

1. Labour backing brexit referendum
2. Heavy reliance on Libdems would limit “scope for radical policies”
3. “Labour‘ s fiscal policies no longer look profligate relative to the conservatives”...
Miliband or even Brown would have cut their arm off to be able to quote such comparisons - and here the analyst acknowledges their assessment has changed within the past year.

Election result though v difficult to predict, as would be the configuration of any Parliament etc...
That City economists see Remain as better for GDP than No Deal, of no surprise ofc. Key thing is some now openly argue would outweigh statism/ less flexible labour markets - Opposition also now losing shyness/openly backing so-called “final say” ref in official literature vs PM
Obviously we’ll have truly jumped shark when Corbyn and McDonnell complain about a so-called “bankers’ Brexit”, and then quote these types of reports in the next or possibly same sentence... Still - first time I’ve seen this- Brown/Miliband got bad write ups on fiscal credibility
Other economic analyses are available —> eg in the thread from UBS, anticipating sterling up sharply if there’s Con big majority (on certainty of a deal) but also a Labour-led government, a bit less so on labour majority, but falls with Con-led Govt or small majority... see below
v. real question for an upcoming election is whether it occurs after an OBR forecasting round - surely at some point they will start to incorporate greater probability of No Deal, or even assume it - Does Labour then claim significantly healthier fiscal baseline for spend plans?
Indeed what is baseline Brexit assumption for main parties’ manifestos? Presumably Conservatives include Vote Leave style policies only possible after Brexit - individual VAT cuts etc. Will Labour manifesto be compatible with no Brexit/eea - on eg state aid? Surely it has to be.
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