UK: Fractious politics - Westpac

UK’s fractious politics has led to the initial Brexit vote and are now intrinsic to the difficulty in firstly forming a clear negotiating platform and Parliament passing the withdrawal plan, according to Tim Riddell, Research Analyst at Westpac.

Key Quotes

“PM May is dependent upon either mass abstentions or cross-party dissenters voting with her Cabinet’s proposal. Both outcomes seemed extremely slim prospects at the beginning of this week. However, deep concern over what might happen if the vote fails could reduce the risk of a “no-deal” scenario and raise the potential of Brexit being halted.”

“If the vote fails/May departs, options include:

Delaying 29th March departure to work on:

- alternative post-Brexit relations - a secondary referendum

- an election

- rescinding the Article 50 trigger

- a new PM driving an alternative Brexit (be it hard Canada-plus or soft Norway-plus).”

“Uncertainty and volatility will remain high but disorderly exit risks appear to be reduced.”