UK: Another referendum is the most likely route out of the impasse – ABN AMRO

Bill Diviney, senior economist at ABN AMRO, points out that the UK Parliament is due to vote on Prime Minister May’s Brexit deal this evening (sometime between 20:00-22:00 CET) and in spite of May’s efforts to obtain assurances from EU leaders over the controversial backstop provision, opposition to the deal is as strong as ever.

Key Quotes

“Twelve former cabinet ministers wrote a letter urging MPs of Theresa May’s own party to reject the deal, while the DUP – which props up May’s government – and the opposition Labour Party have confirmed that the assurances are not sufficient, and that they will vote against the deal. The question is on the extent of the defeat, rather than whether it happens.”

“The next steps involve a no confidence motion from opposition leader Jeremy Corbyn – perhaps as soon as this week – which will likely fail, and the Prime Minister presenting her ‘Plan B’, due by next Monday at the latest. Events could go in any number of directions thereafter.”

“We believe the most likely scenario is another referendum. There is clearly no majority in parliament for no-deal. In any case, Brexit looks likely to be a softer one than Theresa May’s deal, and perhaps will not happen at all.”