In view of analysts at Danske Bank, yesterday’s Brexit vote in the House of Commons set the scene for a renewed collision course with Brussels.
Key Quotes
“Against our expectation, the Brady amendment (replacing the backstop with ‘alternative arrangement’s) passed while the Cooper amendment (requiring a vote on asking for an extension of Article 50 if no deal was reached by 26 February) failed.”
“PM Theresa May now needs to go back to the EU27 leaders but they have been adamant in saying they will not renegotiate the Withdrawal Agreement. That said, the EU may be more willing to listen now that May has found a majority. As May has promised another similar vote on 14 February if no deal is found by 13 February, it means she has two and a half weeks to renegotiate the backstop, which seems unrealistic.”
“Uncertainty remains high but overall, yesterday’s vote support our base case that May’s deal (or something very similar) will pass eventually (40% chance). The second most likely outcome is a second EU referendum (30%).”
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