Bank believes deal reduces the chances of a “disorderly” Brexit

Senior figures at the Bank of England believe that a breakthrough in Brexit talks is likely to boost confidence among individuals and businesses.

A week ago, the European Union said it was satisfied that negotiations could proceed to the next phase, after an agreement was reached on key issues such as the UK’s divorce bill and citizens’ rights.

The end of the impasse seems to have calmed the nerves of those who were worried that the UK was heading for a “no deal” scenario.

The minutes of the most recent meeting of the Bank’s Monetary Policy Committee said that the deal struck between Britain and Brussels had reduced the likelihood of “a disorderly exit.”

Committee members believe that this in turn will bolster the confidence of both businesses and households, for whom the ongoing uncertainty has posed a number of challenges.

The most recent report also considered the impact that last month’s Budget was likely to have on the economy.

It notes that a decision by the Chancellor to scale back austerity policies is likely to lift GDP by around 0.3 per cent by the close of the decade.

Following last week’s announcement that Brexit negotiations would be moving to the next stage, business leaders gave a cautious welcome.

Although many industry leaders have warned that there is still much work to do and questions need to be answered as to the UK’s future relationship with Europe and how transitional arrangements will work in practice.

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