Government sets 2021 marker for EU trade deal

• ▀ We expect the UK and EU to agree an FTA that will take effect on 1 January 2021, two years earlier than we had previously assumed. The earlier introduction of trade barriers will dampen the post-coronavirus recovery.
• ▀ The economic case for delaying the implementation seemed to have been strengthened by the pandemic, which has left firms and the government ill-equipped to adapt. But political considerations have won out.
• ▀ We think a basic trade deal is more likely than not. The terms of the withdrawal agreement mean that failure to agree an FTA would increase frictions on trade between GB and NI. The UK will also be keen to protect vulnerable sectors.