The title could also be Boris vs the City or Boris vs the EU Commission. Each is a center of opposition to the Brexit project and an opponent that must be overcome or circumvented by the new Prime Minister to keep his October 31st promise.

In June 2016 the United Kingdom voted 51.9% to 48.1% to leave the European Union.  Of the four components of the UK, England and Wales voted to leave while Scotland and Northern Ireland chose to remain.  Within England it was London and its suburbs that provided the staunchest backing for EU membership. 


At an overall electorate turnout of 72.2% after a lively, challenging and well-covered campaign the surprise result cannot be represented as anything but the considered decision of the electorate.

Prime Minister David Cameron who called the vote to quiet the EU skeptics in his own Tory Party, may have been as shocked as the media by the bumptious voters, but there is no reason and no logic to declare the vote illegitimate as both the Conservative and Labour Parties acknowledged by promising to implement the departure.

Whatever the reasons for the nationwide vote, opposition in London’s financial and business centers and Parliament has meant that Theresa May was unable to find a formula to satisfy those members of both parties who wished to remain and Conservative Party leavers.  

The Labor Party tried to keep a neutral stand on the various Brexit deals and many Labour members who voted against Ms May’s agreements represented constituencies that voted heavily to depart.  

After all the Parliamentary maneuvers the twice extended exit date on October 31st remains the default position between the UK and the EU. 

The Commons may have voted not to leave the EU without a negotiated agreement but without an extension from the EU or a change of heart in Parliament or the government, that Parliament approved date is intact. Accordingly the UK will no longer be a member of the EU on November 1st.

Theresa May’s negotiations with the EU Commission were crippled by the inability to use a no-deal exit as leverage. No doubt Ms May and many of her backers in the Tory Party were sincere in saying that the potential economic turmoil was not worth the risk, many were also hoping to thwart Brexit entire but that didn’t change the fact that the UK gave away its strongest weapon before even starting.

Michel Barnier and the EU Commission were to astute to mention the obvious but the terms of the deal and the repeated humiliations of Ms May speak for themselves.

Boris Johnson has resurrected the attenuated ghost of a no-deal departure  by refusing to rule out that outcome but has been vague on how he will force the EU to re-open talks.

The EU has said that the fundamental elements of the agreement, particularly the Irish border terms are not negotiable. The Commission says it does not want a no-deal exit but thinks that the economic damage would be far worse in the UK that the EU. Since the balance of trade between the two is heavily in favor of the EU that stance is a negotiating tactic not an economic fact.

It is likely that when faced with a no-deal reality, or the bureaucratic facsimile of one, the Commission will become more flexible.

Which brings us to the chief question for Boris Johnson. How to exert enough pressure on the EU and the Brexit opposition in the UK to make the Brexit deal palatable and acceptable enough to pass Parliament?

The answer is two-fold.

First make no-deal as real as possible. Not only plan for it in a public and persuasive manner but make it plain that the October 31st departure is still the law that Parliament passed.  

Second, it might not be amiss to remind the EU and the world, perhaps not by the PM himself, that treaties between nation-states are voluntary. Ultimately they are policed by force or not at all. If the UK abrogates the Lisbon Treaty certainly the initial EU reaction would be to block all cooperation. But the economic logic of that would be as detrimental to the EU as to the UK.

As October 31st approaches the UK government could announce that it will selectively withdraw from specific aspects of the EU treaties and keep others in place.  Westminster could essentially let the EU know what it will do and let the EU decide how to respond.  

Will the EU then block all trade with the UK until a comprehensive agreement is negotiated? Will it revoke the work permission of the UK subjects on the continent?  The details are in some sense, less important than the notice such a policy would send to Brussels that the decision to leave is irrevocable.

The Brexit negotiations have never tested the EU resolve or its unity.  That trial may be coming. Boris has more options than most people realize.



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.

Analysis feed

Latest Forex Analysis

Editors’ Picks

EUR/USD surges above 1.1100 as Trump announces steps against China

EUR/USD is trading above 1.1100, up on the day. President Trump said he orders companies to search Chinese imports for drugs. Earlier he criticized Powell's lack of action. 


GBP/USD jumps above 1.2250 on USD weakness

GBP/USD is trading close to the monthly highs above 1.2250 as the US dollar falls following Powell's hint of cutting rates and Trump's angry response. 


USD/JPY plummets to ten-day lows below 106 as Trump goes berserk on Twitter

The USD/JPY came under strong selling pressure in the last hour and erased nearly 100 pips as US President Donald Trump's latest rant on Twitter forced investors to seek refuge and ramped up the demand for safe-haven JPY. 


Powell powerless against Trump's trade wars – US braces for recession, USD set to move

"The most powerful central banker in the world" – is how we and others characterize Fed Chair Jerome Powell. While that may be true – monetary policy is reaching its limits – especially in the face of a trade war.

Read more

Gold gains more than $30, eyes 2019 highs on Trump’s tweet

Gold continues to rise sharply amid concerns about the impact of the escalation in the US-China trade war. The demand for safe-haven assets emerged over the last hours, leading to a rally in the yellow metal. 

Gold News