Delaying Brexit: What does it mean for the economy and markets?

As the clock counts down to 29 March, there is a growing sense that the deadline will need to be pushed back to allow more time to find a deal that the UK parliament can get behind. One way or another, it's looking increasingly likely that lawmakers will get a two-way vote between 'no deal' and an extension to Article 50 in mid-March. But even if the UK does ultimately request a delay via an extension to the two-year Article 50 negotiating period, there’s a big question over how long it might last.

A shorter extension might have short-term political and practical advantages, but it would likely be more damaging for the economy and could easily write off a Bank of England rate hike until much later in the year or beyond.

A longer extension, while potentially more politically awkward for the UK government, could see growth recover a touch in the near-term as the imminent ‘no deal’ threat recedes.