London (AFP)
The overwhelming victory of Boris Johnson in the British legislative elections is expected to achieve Brexit by the end of January and bring a breath of fresh air to the fifth largest economy.
On the assumption, however, that the head of the Conservative government quickly achieve its key promise, the United Kingdom is not at the end of its sentences because will open for months or years, perilous trade negotiations with the EU.
"Even if the exit agreement of the EU is adopted, the road is still long," notes Catherine McGuinness, one of the leaders of the City of London, the lobby of the powerful British financial sector.
In the short term, the stock market was at the party, the FTSE 100 index of the main stocks taking 1.45% at the end of the session, and the FTSE 250, representative of the British economy, blazing 4% to a historic record.
The pound, the barometer of the markets on the Brexit, flew into the night beyond 1.35 dollar, to the highest for 18 months, and against the euro it briefly returned to its level of July 2016, shortly after the referendum on Brexit.
"The companies wanted to end the uncertainty," said Finance Minister Sajid Javid, interviewed on the Sky News TV channel.
Even though a large number of business leaders voted against an exit from the EU, most had been asking for months for the lifting of the political and economic uncertainties that were stifling the growth, now stalled.
Carolyn Fairbairn, managing director of CBI, the UK's largest employers' organization, has also called on Twitter Boris Johnson "to use his strong mandate to rebuild confidence and end a cycle of uncertainty" on Brexit.
- Budget stimulus -
Beyond Brexit, the new legislature should mark "the end of a decade of austerity, and the economy should soon enjoy a significant fiscal stimulus," says Ruth Gregory, Capital Economics.
The Conservatives have pledged to inject hundreds of millions of pounds into hospitals and transport, promising an "infrastructure revolution", at the risk of triggering a jump in debt and deficits.
Among the reactions Friday to the victory of the conservatives, the Federation of Chambers of Commerce (BCC) demanded to "reform the tax on commercial premises" - the Prime Minister promised to lower it.
It also calls for moving forward in major transport projects such as the highly costly HS2 rail line, or the extension of London's Heathrow Airport, criticized by conservationists.
As for the UK's commitment to carbon neutrality in 2050, the Conservatives are much more timid than the Labor Party, which promised a "green deal" and hundreds of billions of pounds worth of investment. the energy transition.
- slow growth -
Jonathan Portes, economist at the Brexit think tank The UK in a Changing Europe, does not expect a brighter outlook: if there will be a surge of consumption - or real estate - it will be modest ", he predicts.
According to him, "the British economy will remain on a slow growth trajectory", in particular because the increases in government spending should not be enough to "offset the damage suffered by the public services" during a decade of austerity.
With the agreement negotiated by Boris Johnson, the entire United Kingdom including Northern Ireland will leave the EU after a transition period of one to three years.
The real challenge will be the UK's future free trade deal with the EU, as it will determine the country's relationship with its main economic partner for the next decades, even though the Johnson government is also banking on trade negotiations with the EU. other countries, especially the United States.
The think tank The UK in a Changing Europe believes that the Brexit Johnson version agreement could "bring down the UK's gross domestic product per capita from 2.3% to 7%, compared to whether it remains in the UK. 'EU' over a period of ten years.
It is close to the forecasts that the British government put forward in a report a year ago.
Jonathan Portes observes that even if a future free trade agreement is aligned with the European Union in terms of regulations, with minimal or no customs duties, and no quotas between EU-UK transactions, economic impact can not be totally neutralized.
© 2019 AFP