No Deal Brexit is now rated likelier than ever

Wouldn’t it be nice to have some answers to all the Brexit questions we’ve been asking forever? Will it happen and if so, on time? If not, will there be a second referendum or a snap election? Yesterday’s famous day of amendments in parliament was meant to at least start to resolve them. It didn’t. Instead, MPs chose to kick the can down the road, yet again.

That isn’t to say nothing changed. Following the failure of the most significant amendments – put down to Yvette Cooper and Dominic Grieve – the odds about the UK leaving on 29/03/19 shortened dramatically to 3.0, although they’ve since drifted back somewhat to 4.0. Other key markets are also trending differently.

Brady amendment delays moment of reckoning

The big takeaway from yesterday is that No Deal is certainly likelier. Thanks to overwhelming Tory support, Theresa May got her first wish. Parliament backed the Brady amendment, to accept the Withdrawal Agreement in principle, so long as the Irish border backstop is removed. She can now point to a mandate from parliament to renegotiate this specific point with Brussels, for what that is worth.

Within minutes of the amendment passing, various EU voices from Tusk to Macron reiterated their consistent stance that the deal cannot be reopened and the backstop stays. To nobody’s surprise, the circle can’t be squared. Presumably it won’t keep Tory Brexiters on side when the vote returns on February 14th and the parliamentary drama will spike again.

Another amendment – expressing the House’s wish to avoid no deal – passed, but it isn’t binding. Every day that there is no legislative action to avert it – or indeed a settled will about how to do so – the likelihood increases. At 4.2, the odds just hit a new low.

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