Thought January 11, 2019 / 04:31 pm UTC

Brexit Limbo All Over Again

By Andrew Wroblewski

It is still highly unlikely that Parliament will approve PM Theresa May’s Brexit Withdrawal Deal in the formal vote next Tuesday. While the already-slim chances of the UK suffering a "no-deal" Brexit have fallen further, it is unlikely that next week’s parliamentary events will make the eventual Brexit resolution any clearer.

Notably, the UK government’s Brexit rhetoric has shifted. No longer is it claiming that Parliament must choose between the Brexit Withdrawal Deal that May agreed to in November or face the alternative of a (painful) no-deal. Instead, the government is suggesting that the choice is now between the PM’s deal or no-Brexit. This shift partly reflects the (constitutional) efforts Parliament has made of late to reassert itself against a no-deal. It also reflects clearer signs from within the Cabinet that May would face a revolt if she allowed the UK to drift too close to no-deal cliff edge.

But just because Parliament is collectively willing to show its distaste for a no-deal does not mean that it is any nearer to offering an alternative deal that would command a majority in the still very-divided House of Commons. Indeed, the Labour opposition may still try and opt for a fresh election rather than more actively consider a fresh referendum that would otherwise provide perhaps the least-difficult way out of the current impasse.  In addition, May will probably be unwilling to ditch her Brexit Withdrawal Deal entirely in the hope that the EU may make some further concession that would eventually make it more palatable to the UK Parliament.

As result, the Brexit impasse may continue without any clearer a picture of what may be the eventual resolution. This reinforces our existing view of Brexit limbo persisting enough to necessitate an extension of the March 29 Brexit deadline.

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I, Andrew Wroblewski, the lead analyst certify that the views expressed herein are mine and are clear, fair and not misleading at the time of publication. They have not been influenced by any relationship, either a personal relationship of mine or a relationship of the firm, to any entity described or referred to herein nor to any client of Continuum Economics nor has any inducement been received in relation to those views. I further certify that in the preparation and publication of this report I have at all times followed all relevant Continuum Economics compliance protocols including those reasonably seeking to prevent the receipt or misuse of material non-public information.