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“Prime Minister (PM) May avoided another outright confrontation between the pro-EU and pro-Brexit camps within her cabinet and party as the House of Commons voted down an amendment that would have given parliament more influence over Brexit negations if the government failed to reach a deal,” note Rabobank analysts.

Key quotes

“A confrontation between the two camps risks antagonizing the pro-Brexit Conservatives and triggering a Tory leadership challenge. PM May has managed to postpone such a confrontation by fudging solutions to various Brexit issues at the cost of remaining vague in its official standpoint towards the EU.”

“As a result little progress has been booked on negotiations with the EU since March and that risks delaying the deadline for a signed withdrawal agreement towards the end of 2018. This reduces the time available for ratification and maintains high Brexit uncertainty for longer, which is likely to speed up preparations for a ‘hard Brexit’ as the possibility that this scenario unfolds persists.”

“Nevertheless, we maintain our base case of a last-minute deal that leads to a transition period up to December 2020 and a comprehensive Free Trade Agreement afterwards.”