UK: High degree of polarisation at home further complicates the situation – Rabobank

“PM May is facing the risk of a leadership challenge and the Conservative Party Congress from 30 September to 3 October is an important milestone for that,” Rabobank analysts note.

Key quotes

“The turn of events in Salzburg has weakened any support she enjoyed for her ‘Chequers’ plans. This, however, may shield her from a leadership challenge. Past events illustrate that her weakness has at times been her strength, as her political rivals might find it more costly to attack her when she is weak. Particularly as her stance in Salzburg might be perceived as her standing up for the UK in front of the EU.”

“Labour’s official support for a second referendum in case a deal is rejected by parliament and general elections  cannot be triggered further complicated domestic politics. After Salzburg PM May said the UK would come with an alternative solution for preventing a hard Irish border, but this is only expected after the Conservative Party congress, leaving roughly two weeks for booking sufficient progress in the talks with the EU before the October summit.”