According to Christopher Graham, economist at Standard Chartered, the outlook for Brexit remains highly uncertain, with all options still on the table, but the longer this uncertainty persists, the more likely an early UK general election.
Key Quotes
“Every strategy Prime Minister (PM) Theresa May has employed to get Brexit over the finish line has failed, and while cross-party talks continue, they look unlikely to yield a deal with widespread support in Parliament. The PM remains resolute, and hopes to push through her Brexit deal via legislation in early June, but the odds are firmly against its success. She might hold onto power for a few more months, but a growing number of Members of Parliament (MPs) – and a growing proportion of the Conservative Party base – have become increasingly opposed to her leadership.”
“Barring a last-minute breakthrough on Brexit, it appears only a matter of time before her position becomes untenable, and she steps down or is removed from power, triggering a Conservative Party leadership contest.”
“Although the timing of such an event is uncertain, we think any new leader would be incentivised to call a snap general election. There may be a first attempt to push through a new version of Brexit – similar to the PM’s deal or a pivot to a no-deal exit – but given the deep-rooted divisions within the current Parliament, we think that a new leader will face the same difficulties as has Theresa May and will be forced to call an election.”
“At the same time, the opposition Labour Party would probably push for a vote of no-confidence in the government if cross-party talks failed. Given the number of Conservative MPs who have grown disillusioned with Theresa May, this vote could be close.”
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