Fitch now assumes UK will quit Europe without trade deal - report

Credit ratings agency Fitch has changed its outlook and now believes the UK with leave the European Union without a trade deal in place, it emerged on Wednesday.

During an online conference, which was covered by Reuters, chief economist Brian Coulton was reported as saying: “With limited progress so far in negotiations on a free trade agreement [...] and time running out, we now assume that UK-EU trade will move to WTO terms in January.

“It’s very hard to model this, but we have knocked around 2% off our 2021 forecast for the UK because of this change in assumption.”

Fitch, which is due to review the UK’s AA- negative outlook rating later this month, expects the UK’s economy to stall in the first half of next year, Reuters reported.

Trade talks between London and Brussels resumed on Tuesday, with prime minister Boris Johnson apparently insisting a deal must be struck by 15 October.

If the Brexit transition period ends on 31 January without an agreed trade deal in place, the UK will have to trade with the bloc on standard World Trade Organisation terms.