Research Team at Nomura, suggests that the hope is a powerful thing, especially when UK’s “Soft Brexit” is involved, and that’s what the High Court ruling against the government has provided markets.
“Already commentators are discussing the possibility of a failed vote, delayed Article 50 trigger, early elections and indeed another referendum. But this is likely to be a false hope and one that could eventually prove painful once the market’s Hard Brexit realisation comes back into full play.
But that wake-up call is some time away, we think, as we will have to wait until December for the court ruling and perhaps even into the new year before any vote in parliament (likely to go through quite easily in our view) is out the way. If we’re wrong and the vote fails and perhaps leads to a snap election, it would only serve to improve the government’s majority in the house, further adding to the Brexit mandate. So if an election is called, we don’t see it increasing the likelihood of a Soft Brexit, but instead potentially ending it.”
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