James Knightley, Chief International Economist at ING, suggests that in their view is that this is going to go down to the wire – British MPs feel that there are several months before the “hard” deadline in March 2019 and as such there is no impending pressure to get a deal done right now.
Key Quotes
“There is no majority in the House of Commons for a “no-deal” Brexit and that is why the most likely route of success is to put a simple choice of the UK leaving without a deal or the UK progressing into a smooth transitional arrangement as late as possible to help focus minds. This is obviously at odds with the EU timetable and will anger EU leaders, but it is difficult to see much of an alternative at this stage.”
“This will be economically damaging for everyone due to the uncertainty and worry it causes for businesses and individuals, but it will be the UK that is hit hardest. Some notable manufacturers in the UK are already warning of plant shutdowns over the Brexit period and others are likely to follow suit. After all, there is a very real fear that components could be trapped on motorways as ports grind to a halt under the burden of customs and regulatory checks at a time when there aren’t enough qualified staff available to deal with it.”
“There are also warnings of food and medicine shortages. The UK only produces 60% of the food it consumes and there are major questions over what will happen in supermarkets. Hungry voters tend to be quite angry voters and MPs will not want to risk the wrath of the electorate. As such, we keep coming back to the point that the most likely scenario remains we get an 11th hour deal to allow the UK to go into a transitional arrangement that effectively keeps things as they are until December 2020.”
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