Exclusion of no deal from analysis renders BoE's projections uncertain

Latest inflation report assumes smooth transition to UK-EU deal, but markets take different view

What if Napoleon had won the battle of Waterloo? What if Lord Halifax rather than Churchill had become prime minister in May 1940? To the "what if" history book could soon be added a new chapter - "what if" the UK had exited the EU with a deal in October 2019?

That, despite everything that has been happening at Westminster in the past week, remains the assumption of the Bank of England. In its last inflation report before the Brexit deadline, the Bank said its base case was a smooth transition to a UK-EU trade deal. Its projections do not include the possibility of a no-deal exit.

Boris Johnson, prime minister

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