Should the UK recession forecast be scrapped?

Morgan Stanley and Credit Suisse have scrapped their forecasts that the British economy will fall into a recession after the Brexit reference. However, in fact, they have not scrapped their forecasts completely, they just delay the coming of the possible UK recession. They seem to hold their belief that the UK economy may not survive outside the European Union.

However, I actually hold a different view and become more optimistic than I was when the result of the referendum first released. Some surprisingly decent economic data brightens many people's expectations about the future of the UK economy. Although the UK economy could be actually affected once the Article 50 is triggered, that will be a few years later. Time matters a lot here. The result of the referendum has surprised many people, under such situation, the market will definitely overreact to the referendum, just as the market did at the end of June. However, as we see that the market is moderating itself, though some people may choose to ignore the fact of Britain is leaving the European Union, as it does not happen immediately, some people believe that Britain and the European Union could negotiate well and deliver a new agreement which is the best for the mutual benefits.

Britain and the European Union definitely want to trade with each other, as from many data, they have very large shares in each other's markets. Moreover, the European Union itself is progressing some free trade deals with other countries, like Canada and Australia, which means after Britain leaves the European Union, it does not stop Britain from being a free trade partner of the European Union. As the time passes, the public and the politicians are much less emotional, so a revengary action is less likely to be taken. Based on the above reasons, I think Britain can make a nice trade agreement with the European Union.

To conclude, I am not saying the British economy is unlikely to fall into the recession, I am saying that leaving the European Union is not going to the cause which drags the British economy into a recession.