Delayed or not, a no deal Brexit remains highly plausible

This piece was first published on March 5th, 2019

The chances of the UK leaving the European Union without a deal in 25 days time remain extremely low, according to Betfair markets. That dramatic outcome can be backed at 7.8 – equivalent to 13%. At 5.6 (18%), an on-time Brexit is only rated slightly likelier.

Only a no deal Brexit would mean leaving on time

Before discussing what comes next, it is worth noting the discrepancy between those two betting options, which almost certainly amount to the same thing. There is no way the Withdrawal Agreement can be ratified by both UK and EU parliaments by 29/03/19 so anyone betting on an on-time Brexit is advised to take bigger odds via the No Deal market.

On the bare facts, these betting trends reflect a high degree of confidence in parliamentarians getting some sort of act together to prevent no deal. Strange, perhaps, given their inability to unite around Brexit solutions to date. There is a plan, for sure, but anyone who has followed this process must be wary of making assumptions.

May’s deal is expected to lose again

The timetable is as follows. By next Tuesday, Theresa May will have resubmitted her Withdrawal Agreement to the Commons. She is expected to improve on the previous 230 vote defeat but still fail. Betfair punters rate it 71% likely that the Withdrawal Agreement will not pass before the official exit date at odds of 1.4.

It is true that, as Max Liu reported on Sunday, senior Tory critics are softening their stance.

Despite almost certainly having little to offer her critics regarding the backstop, May will win round dozens of MPs because Brexiters fear it may never happen otherwise. Converting 116 by next week, nevertheless, is a tall order.

At that stage, May has promised a vote on extending Article 50. We must assume this will pass overwhelmingly, in accordance with the clear majority against no deal. It would be wildly wrong, however, to assume it will avert the threat of no deal.

EU uncertain to agree lengthy extension

First, the EU have to agree. If the deal has passed and awaiting ratification, a short delay won’t be a problem. Otherwise, they are reportedly offering merely a two-month extension, with the proviso that the UK moves the process forward – either via a referendum or election.

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