With only days to go until the October 31 deadline, UK Prime Minister Boris Johnson is hailing an agreement with the European Union over a Brexit deal. Trade is high on the news agenda - specifically, how it will be conducted between the UK and European Union once the former leaves the 27-nation customs union and single market.  

The UK now exports more to the rest of the world than it does to the EU, which is the destination for 46 per cent of UK goods and services. This marks a long term trend that was exacerbated by the eurozone debt crisis and is expected to continue whatever the outcome of Brexit. As a result, the UK will need its trade agreements with the rest of the world to pick up the slack.      

Meanwhile in the UK, the pound’s weakness following the Brexit vote in 2016 has helped boost key sectors within the FTSE 100 index. Most companies generate around three-quarters of their earnings abroad, and so their shares have benefited as the currency has declined.   

Finally, there’s a risk that noisy Brexit headlines have drowned out other major factors. While Brexit is an important consideration for the UK economy, the risk of a deepening slowdown in the US may have a bigger impact on GDP growth overall. The drama of a last-minute negotiation with the EU is exciting, but the UK’s economy may ultimately be shaped by events elsewhere.

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