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Analysts at Rabobank point out that following a disastrous summit last week in Salzburg, when her Chequers deal was firmly rejected by European leaders, UK Prime Minister May convened her cabinet today.

Key Quotes

“Not only May faces a potential confrontation with her ministries, but the split within the Conservative party may widen further as Boris Johnson and David Davis – the leading Brexiteers – are set to be looking to endorse a Canada-style trade deal with the EU.”

“Speaking last week PM May sounded adamant that the Chequers plan is the only viable proposal and that the UK is prepared to leave the EU without a deal. Such a firm stance from both sides is part of negotiation strategy and that a compromise will eventually emerge five minutes to midnight.”

“While our baseline scenario of a “successful conclusion” of the Brexit talks to conclude in November prevails, we are not complacent about the risk of a hard Brexit if the current impasse prevails.”