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RidetheMacro| GBPRUB Russia on Track Again!A "no-deal" Brexit could be three times more costly to Britain's economy in the long term than the coronavirus outbreak, a new study published Tuesday warned.the political and economic effects of the pandemic were likely to mitigate or hide that of failing to secure a trade agreement with the EU. 📌 But in the short term, the lack of a new formal trading relationship with Brussels would be bad news for economic recovery and larger than the health crisis in the long term.The think-tank, which collaborated with the London School of Economics, said Brexit would hit growth in the coming years more than if the UK had opted to remain in the bloc. 📍 "The claim that the economic impacts of Covid-19 dwarf those of Brexit is almost certainly correct in the short term," its authors wrote. "Not even the most pessimistic scenarios suggest that a no-deal Brexit would lead to a fall in output comparable to that seen in the second quarter of 2020. 📍 "However -- assuming a reasonably strong recovery, and that government policies succeed in avoiding persistent mass unemployment -- in the long run, Brexit is likely to be more significant. 🔑 the UK’s recovery from the Covid-19 lockdown was losing momentum even before the announcement of new restrictions to control the spread of the virus, the latest snapshot of the economy has found. 📍 The closely watched monthly estimates from Cips/Markit found the level of activity at its lowest since June, the outlook for business at its weakest since May and jobs being shed at a rapid rate. The Cips/Markit report flash estimate of the service and manufacturing sectors dipped from 59.1 in August to 55.7 in September. but the survey was conducted before the introduction of fresh curbs across the UK this week. The marked dip in the PMI prompted speculation among City analysts that the UK could be heading for a tough end to 2020. 📍 The study estimated that the negative impact on gross domestic product would be 5.7 percent over the next 15 years compared with the current level, while GDP was forecast to take a 2.1-percent hit from Covid-19. The projections come despite a lack of clarity about the overall repercussions from the pandemic, and as a second wave of infections hits Europe. 📌 For RUB 🔑 The Salary growth numbers for July (this data comes with additional lag) significantly outperformed expectations, posting a 2.3% YoY jump in real terms after a 0.6% YoY increase in June. Though this data is more relevant to the larger businesses and state sector, and the situation in the SME sector could be different, other sources of income were likely supportive as well: the budget fulfillment data for 8M20 point at continued acceleration of spending on pensions and social security. 🔑 the earlier estimates for retail trade for April-July have been improved by 0.6-0.7ppt YoY, including from -2.6% YoY to -1.9% YoY in July, suggesting that the drop in smaller businesses was not as deep as expected. Until the Next Time.🙏 Ridethemacro
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