A leading bank has predicted that there is a 25 per cent chance of the UK leaving the EU with ‘no deal’ at the end of the year with Boris Johnson taking over as prime minister.
Investment bank JP Morgan released its findings which upgraded the chance of the UK leaving the EU on a World Trade Organization (WTO) deal to 25 per cent from 15 per cent.
If the bank’s forecasts are to be believed, Mrs May’s withdrawal agreement will fail to pass the Commons for a fourth time in early June. The chances of Mrs May’s deal passing, according to JP Morgan, have reduced from 35 per cent to just 15 per cent.
This, they believe, will lead to the resignation of the prime minister. In a subsequent leadership contest, JP Morgan predict that Boris Johnson will win and become the new prime minister sometime in September.
The bank believes Mr Johnson will run on a campaign of leaving with ‘no deal if we have to’. They go on to predict that “the EU refuses his central objective of removing the backstop from the Withdrawal Agreement.
“The Commons begins the process of legislating to force Johnson to seek an Article 50 extension, and Johnson calls a general election seeking a mandate for his approach.”
This, they believe, will lead to an agreement between the UK and the EU to extend Article 50 until the end of December to allow time for the General Election and talks that follow it.
Tusk: ’30 Per Cent Likelihood That Brexit Won’t Happen’ https://t.co/39EaOkASoA
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The bank’s predictions may not be too far fetched. It is almost certain that the prime minister will resign in early June if her Brexit deal does not pass the Commons, which looks increasingly unlikely with several groups including the Democratic Unionist Party (DUP) and a number of Conservative Brexiteers threatening to vote against it.
Rumours had swirled Wednesday of Mrs May even resigning this week, however, the Conservative Party appears to have once again stepped back from the brink.
If Mrs May does resign, Mr Johnson is by far the odds-on favourite to replace her as Conservative leader and prime minister.
It is also possible that Mr Johnson, a figurehead of the campaign to leave the EU, will have to adopt a tough Brexit stance if he is elected leader as the Conservative Party has been drained of support on a huge scale by the newly formed Brexit Party led by Nigel Farage.
A YouGov poll released Wednesday showed the Brexit Party polling at 37 per cent ahead of tomorrow’s European elections, with the Conservatives in fifth place on just seven per cent.
The predictions of JP Morgan come in stark contrast to those of European Council President Donald Tusk, who recently predicted that there was, in fact, a 30 per cent chance of the UK abandoning Brexit and remaining in the EU.
He spoke of the EU referendum “paradoxically” awakening a pro-European movement in the country and said “after the British referendum in 2016, I thought that if we recognise that the case is closed, it will be the end. Today the chance that Brexit will not happen is, in my opinion, 20-30%. That’s a lot.”