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  • The Conservatives do not have a majority in the House.
  • Boris Johnson now faces a tough challenge of bringing together a coalition of voters.

Senior Labour sources are predicting that fewer than ten Labour MPs will back Government on Saturday. Every vote could count…This is likely not enough for the Brexit deal to gain enough traction in Parliament. The Conservatives do not have a majority in the House, so Mr Johnson has to assemble a coalition of MPs to vote for his Brexit deal.

Sebastian Payne, of the Financial Times, says that they predict ‘318 MPs could vote for the deal, 321 against. Without the DUP, Boris needs to win over at least 2 MPs to pass his new deal.’

”  Boris Johnson faces a daunting task in trying to secure parliamentary approval for his Brexit deal after Northern Ireland’s Democratic Unionist party came out against the new withdrawal agreement.

Analysis by the Financial Times suggests that unless the prime minister can persuade the DUP to drop its opposition, or persuade several Labour MPs or independent parliamentarians to support the deal, Mr Johnson will struggle to win a House of Commons majority.

The FT estimates 321 MPs could vote against the deal, with 318 supporting it.

Many members have yet to declare how they will vote when the Commons considers Mr Johnson’s deal on Saturday. It will be the first Saturday sitting since Argentina’s invasion of the Falkland Islands in 1982.

The Conservatives do not have a majority in the House, so Mr Johnson has to assemble a coalition of MPs to vote for his Brexit deal.

Out of the 287 Tory MPs, nearly all are expected to back the deal, including most of the 28 hardline Eurosceptic Conservatives “” dubbed the Spartans “” who voted repeatedly against Theresa May’s withdrawal agreement.

Government whips who serve as business managers in the Commons will turn the screws on Tory MPs over the next 48 hours. “Our whipping is going to be medieval,” said one government official.

The Spartans belong to the European Research Group of pro-Brexit Tory MPs, whose leader Steve Baker has already indicated he will vote for the deal.

“We’ll meet on Saturday morning to decide whether to support it,” said one senior ERG member.

Downing Street had expected three to five Spartans not to back Mr Johnson’s deal before it was unveiled on Thursday, but none have so far come out against.

The next challenge for Mr Johnson is to win over 23 independent Conservatives “” former Tory MPs who have had the party whip removed.

At least three are unlikely to back the deal: Dominic Grieve, Guto Bebb and Justine Greening.

Most of the other 20 have yet to declare their voting intentions, but the majority are expected to support the agreement, according to Nicholas Soames, the Tory grandee who was among those to have the whip removed.

Our whipping is going to be medieval

Government official
Mark Spencer, Conservative chief whip, told the cabinet on Wednesday that he thought 15 independent Tories would rally behind the deal. Backing the revised withdrawal agreement could give them a route back into the Conservative party.

But if Mr Johnson is successful in winning over the Spartans and independent Conservatives, there is still no Commons majority for a deal.

Without the DUP, the prime minister’s efforts will be partly focused on how many other independent MPs “” mainly former Labour parliamentarians “” can be persuaded to back his agreement.

Three whipless MPs “” former Labour members Ian Austin and Frank Field, plus ex-Liberal Democrat Stephen Lloyd “” are expected to vote for the deal.

If Mr Johnson fails to garner much support among these independent MPs, his last hope is to woo Labour “” against a backdrop of party leader Jeremy Corbyn pledging to oppose the deal.

Until now the number of rebel Labour MPs talking to Downing Street about supporting Mr Johnson’s deal has been only in single figures “” up to nine, who mainly represent Leave constituencies. They are not all certain to back the agreement.

Many Labour MPs went cold on supporting Mr Johnson after he last month demanded that the EU rewrite the terms of the UK’s future relationship with the bloc to allow Britain to substantially diverge from European rules after Brexit –  

Reporting by Sebastian Payne, John-Burn Murdoch, Jim Pickard and Laura Hughes in London.”

FX implications:  

GBP  is a wild card at the moment and the lack of liquidity and woder spreads os making trading the currency like walking through a minefield. The currency has been in demand following the lead into the EU vote today where a Brexit deal was expected to be approved by the 27 member states of the EU – Subsequently, cable rallied towards the 1.30 handle. However, should a deal not be passed by UK lawmakers, then there is no telling what will be in store for the Pound.  

The current bias may be for slim acceptance of the deal, but the margin is so close that it is too close to call.

Analysts at Westpac offered-up the following:

  • The passing of the Withdrawl Agreement (WA) on Saturday is not assured and outcomes for GBP and UK assets are similarly not clear.
  • Numbers are painfully tight, but appear to favour passing the WA, lifting GBP, yields and assets
    If more Labour dissenters support the WA or DUP and some swing (against) voters abstain, the numbers improve
  • If the WA is not approved, the UK will enter a period or renewed uncertainty rather than removing unpalatable hard Brexit alternatives
  • Elections if WA is passed may well provide a stronger Conservative led Govt. to “get Brexit done”
  • Elections if WA is rejected could lead to delay and further uncertainty
  • A push for a second referendum would also create further delay and uncertainty
  • All outcomes other than passing the WA will depress UK yields and assets and GBP

Key Brexit Dates

  • 19th  Oct.  UK Parliamentary Special Sitting
  • Week of 21st  Oct.  Likely  “No Confidence”  Vote  
  • 31st  Oct.  Current Brexit Deadline
  • Late Nov./Early Dec.  Possible UK General Election
  • 12th-13th  Dec.  EU Leaders’  Summit
  • 31st  Jan.  Likely Further Brexit Extension Deadline