Samuel Tombs, an economist renowned for correctly predicting the result of June's general election, has a fresh prediction: Brexit isn't actually going to happen.
Writing in a note circulated to clients of Pantheon Macroeconomics on Sunday evening, Tombs — Pantheon's chief UK economist — argued that Brexit will be so damaging to Britain's economy in the short term that no politician will feel comfortable actually pulling the UK out of the bloc when push comes to shove, both for the sake of their own reputations, and the UK's economic health.
Tombs writes that he believes the UK and EU will eventually agree to a transition deal to smooth Britain's passage out of the EU, but once Britain reaches the intended end of the transition period, it will then stay in the EU. [...]
"The key issue is that leaving the single market would entail short-term economic pain in return for the possibility of long-term gain, in the form of closer ties with fast-growing emerging market economies. This sequencing of the costs and benefits means Brexit always will be unpalatable for any politician, given their myopia. It will be particularly unattractive for the Conservatives to implement Brexit in 2021, one year before the deadline for the next election."
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