Reuters poll sees reduced chances of U.K. slipping into recession in 2017

Latest Reuters poll results of a survey of around 70 analysts taken in the past few days shows that the chances of UK tripping into recession have reduced considerably. Analysts now expect Britain to narrowly dodge a mild recession that was widely predicted after the country voted to leave the European Union.

Poll results showed that the chances of UK tripping into recession in 2017 stand at 35 percent, while BOE is seen slashing bank rate by 15 bps in Q4. The result compared to 60 percent in the July poll.

After the June 23 referendum, economists were almost united in saying a vote to leave the EU would send the country into a mild recession based on an assumption that the government would move swiftly to start the divorce process. However, Prime Minister Theresa May has still not triggered Article 50.

Expectations are that the government will invoke Article 50 either at the end of this year or in early 2017 and there is no clarity on what kind of deal the two sides will strike or even want. Without that, it is hard for economists to predict the path for the economy.

"The near-term hit to the economy won't be as severe as many of the pessimistic pre-referendum forecasts. Indeed, while the economy has clearly slowed after the vote, the probability of a recession appears to have diminished," said Scott Bowman at Capital Economics.