•  Uncertainty channel: Brexit and US-China trade tensions were a persistent source of policy uncertainty through 2019. Recent developments—including the UK election and US-China phase one trade deal—have provided financial markets with some relief. If there has been genuine pent up demand, the global economy could rebound strongly as firms catch up with capital spending.
By contrast, while financial market sentiment has improved, to the extent that Brexit and US-China trade policy uncertainties remain far from fully resolved, a sense of caution from businesses may continue for some time yet. In recent months, coronavirus is a human tragedy that has emerged that we will need to monitor, through all three channels.