Professor Andrew Scott on shoring up the UK economy during negotiations with the EU
Striking deals with big businesses to stay in the UK is one measure that the British government can take to overcome any economic uncertainty arising from Brexit talks.
Andrew Scott, Professor of Economics at London Business School (LBS), said that Britain could secure deals similar to the agreement it has with car manufacturer Nissan.
“Over the next two years, we’re likely to see more and more deals as we saw with Nissan where [the government] tries to provide encouragement for firms to stay put,” he said in a video interview for LBS .
In 2016, the government gave Nissan chiefs assurances that the company would not lose out from Brexit.
Professor Scott said that providing highly-skilled workers easy access is another step the UK can take while negotiating its exit from the EU. Talks between the UK and the 27 union members will run until 29 March 2019.
But the LBS academic added that Britain and the EU will struggle to agree a trade deal in that period. “I just don’t think there is enough time in two years to get a deal done. The best we can do is some form of transitional arrangement.”
Another measure would see the Bank of England increasing interest rates to offset the threat of rising inflation as the British pound declines.
“The bank will have to raise rates to make sure that sterling decline doesn’t feed through to inflationary pressure,” Professor Scott said.