Are Theresa May’s Brexit machinations about to finally unravel?

So much for the old idea that betting markets were fundamentally sensitive to media reports. Despite several days of febrile speculation and almost universal agreement that the crunch time for Theresa May’s Brexit plans and therefore leadership has arrived, Betfair markets related to her exit date remain virtually unmoved.

Markets backing May to survive ahead of hell week

Odds of 7.6 to leave post during Oct-Dec 2018 and 8.0 for Jan-Mar 2019 imply she is 74% likely to see through the entire Brexit process, assuming it ends on time. Presumably, bettors have grown weary of reacting to relentless internal machinations within the Conservative Party that never go anywhere.

Max Liu explained yesterday how this could be her ‘hell week‘, as her government teeters on the brink of collapse, amid divisions over Brexit that seem to be fundamentally unresolvable. The latest is that weekend negotiations did not resolve the Irish border question, and the Cabinet’s Brexiter-faction will meet tonight over pizza to discuss their next moves.

Deal remains deadlocked on Ireland and Customs Union

There was talk yesterday of an agreement at ‘negotiator level’ but even if so, there is no suggestion that political hurdles can be cleared. Any such deal will involve a ‘backstop’ to avoid a hard border in Ireland that, by definition, cannot be time-limited.

If it were, in the absence of a technological solution, uncertainty would persist and the issue would merely be kicked down the road to the new end-date. It won’t satisfy the DUP or Labour, let alone the hardline Brexiters in May’s own party. Likewise, any transitional deal involving Customs Union membership is only likely to appease Brexiters if it has a specific, legally enshrined, end-date.

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