Bill Diviney, senior economist at ABN AMRO, points out that the polling suggests Boris Johnson continues to be the most likely candidate to take over from UK PM Theresa May in the Conservative Party leadership contest (ballots are being sent to party members, with the result announced on 22 July).
Key Quotes
“As the contest between Mr Johnson and rival Jeremy Hunt heats up, a key focus has been his attitude to further Article 50 extensions and the potential for a no-deal Brexit. In an interview yesterday, Mr Johnson ‘categorically’ ruled out a further delay to Brexit, and said that ‘do or die – come what may’ the UK would leave the EU on the currently planned exit date of 31 October. Indeed, we think Mr Johnson would be much more willing to countenance a no-deal Brexit than Mrs May was if he is unable to negotiate changes to the Northern Ireland backstop – as looks likely.”
“And although MPs have shown through a number of votes that they do not support a no-deal Brexit, the legal mechanisms to prevent a Prime Minister intent on pursuing such a course are limited if a deal is not even brought to parliament. As a result, we last month raised the probability we assign to a no-deal Brexit to 25% from 15% previously.”
“In this scenario, the only clear way of stopping a disorderly Brexit would be to bring down the government through a vote of no confidence, triggering an election. However, polling suggests the number of Conservative MPs would halve in such a scenario, bringing the Labour Party to power. Defence minister Tobias Ellwood has said on Monday that ‘a dozen or so’ Conservative MPs would be willing to do so, but a confidence vote could be uncomfortably close.”
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