The great Brexit gamble – Rabobank
|An election will be held on December 12. Prime minister Johnson is looking for a five-year mandate and a parliamentary majority for his Brexit-deal. It is easier for Johnson to win a parliamentary majority in an election than to win a popular majority in a People’s Vote, writes Stefan Koopman – Senior Market Economist at Rabobank.
Key quotes:
“Assuming that clarity on Brexit is the only thing that is broadly desired, party allegiances could potentially break down. The election will be dominated by tactical voting.”
“If Johnson’s bet pays off, the new parliament will be able to pass Johnson’s existing deal. “Brexit” will then move to the tricky negotiations regarding the future relationship.”
“But if Johnson’s bet backfires, the plot will twist again. A minority government led by Labour could lead the UK to a second referendum, and potentially a Remain outcome.”
“The first scenario appears more likely, but opens up the risk of a no-deal Brexit at the end of 2020. A Tory majority may therefore bring plenty of scope for sterling volatility next year.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.