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OFFON

Romain
Fournier

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Brexit: what are the odds?

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07/19/2019 | 10:07am EDT

As the Brexit deadline looms, uncertainty increases. British MPs voted on Thursday in favor of an amendment preventing the next Prime Minister from suspending Parliament to force a no-deal Brexit. However, it has to go to the House of Lords for consideration. Meanwhile, the new EU commissioner has opened the door for another extension. So, what will happen on October 31?


Boris Johnson, the favorite candidate for the post of British Prime Minister, is warned. The controversial politician has been hammering since the beginning of his campaign that the United Kingdom will leave the European Union on October 31 with or without a deal. But the Parliament just voted in favor of an amendment preventing the next Prime Minister from suspending Parliament to force a no-deal Brexit.  Boris Johnson assures that he will not ask for a further postponement of Brexit, claiming to be ready to take the country out without an agreement, a scenario whose consequences are feared by business circles.

But Ursula von der Leyden, the new President of the European Commission elected on Tuesday, says she does not want a no-deal Brexit. In an interview published Thursday evening by several European newspapers, she said that "a Brexit without an agreement would have enormous negative consequences for both sides", and opens the door to a postponement if it can help things move forward across the Channel.

According to ING, A general election is getting more likely

In a report ING thinks the probability of a ‘no deal’ exit in October sits around 20%. “Parliament remains heavily against it, and while lawmakers may lack the legislative tools to stop it, MPs could use a vote of no confidence to force a general election instead. For this to succeed, a majority of MPs in the House of Commons would need to back it.”, the report points out.

However, it adds that “In terms of timing, it’s hard to see a no-confidence vote being successful unless a ‘no deal’ exit looks completely unavoidable. Therefore, if an election is to happen, it’s unlikely to be triggered until fairly late in the day. Taking into account the minimum timings to hold an election suggests the earliest it could realistically happen is just before Christmas.”
 

Source : ING

In light of all these developments, one thing remains clear : the uncertainty around Brexit is not about to be cleared anytime soon… 

Romain Fournier
© MarketScreener.com 2019
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