Chief economist update: Brexit la la la

It won't be over till it's over.

Yes Virginia, the uncertainty that is Brexit festers on, pushed further until Britons have cast their vote at (yet another) general election to be held on 12 December (December 13 in Australia) and from there, hopefully, the UK could Brexit once and for all on the 20 January 2020.

UK Prime Minister Boris Johnson hopes that the elections would increase his party's majority, paving the way for Brexit to be done and over with. Then again, ex-UK PM Theresa May tried the same back when she called the 8 June 2017 snap elections ... for the same reason. We all know what happened and what became of her.

To date, there are still a myriad number of variations, combinations and permutations that could transpire after the December 12 elections, depending on who reigns supreme and if the supremo gets the majority vote.

Given Brexit's historical precedence, it's understandable that Britons and Europeans and the rest of the world are not holding their collective oxygen intake.

However, Bank of England (BOE) governor Mark Carney have changed his tune. If memory serves me right, Carney warned about the increased likelihood that the UK would leave the EU without a deal sometime around August this year.

The Bank of England's (BOE) monetary policy statement published after the monetary policy committee meeting of October 7 - where it kept policy settings unchanged - was more optimistic on Brexit.

"In October, the UK and EU agreed a Withdrawal Agreement and Political Declaration as well as a flexible extension of Article 50. As a consequence, the perceived likelihood of a no-deal Brexit has fallen markedly and the sterling exchange rate has appreciated. These agreements are expected to remove some of the uncertainty facing businesses and households, and the MPC projects that UK GDP growth will pick up during 2020," BOE said.

Then again, the BOE's is prepared for the worst and is ready to act if necessary: "Monetary policy could respond in either direction to changes in the economic outlook in order to ensure a sustainable return of inflation to the 2% target."

"The Committee will, among other factors, monitor closely the responses of companies and households to Brexit developments as well as the prospects for a recovery in global growth. If global growth fails to stabilise or if Brexit uncertainties remain entrenched, monetary policy may need to reinforce the expected recovery in UK GDP growth and inflation.

"Further ahead, provided these risks do not materialise and the economy recovers broadly in line with the MPC's latest projections, some modest tightening of policy, at a gradual pace and to a limited extent, may be needed to maintain inflation sustainably at the target."

Even better, and what could be the start of the adoption of JMK's (John Maynard Keynes) counter-cyclical prescription around the world - fiscal policy spending - the Conservative Party pledges government spending on infrastructure - roads, railways and construction - as well as tax cuts if re-elected, reported to take fiscal spending from the current 2% of GDP to 3% of GDP.

Not be outdone (or outvoted), Labour promises to double this - £55 billion a year versus £22 billion.

It makes sense that the country that gave the world JMK be the first to put his advice into practice.

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