The City of London is raising the odds that Brexit won’t actually happen


Brexit protest

Both JPMorgan and Nomura now see the prospect of staying in the EU as having around a 40% chance.
This week has seen the European Court of Justice say that the UK should be able to unilaterally withdraw from leaving the EU.
That, and a parliamentary amendment that gives British lawmakers more say in the deal should Prime Minister May’s deal fail, have raised the likelihood of staying in the EU.

A rising of tide of City of London analysts now see an increased likelihood of the UK deciding not to leave the European Union after all, and simply cancelling Brexit.

JPMorgan’s Malcolm Barr now puts the odds of scrapping Brexit at 40%, a sharp spike from 20% odds he had previously put on the scenario. Japanese banking giant Nomura now also sees more probability of the UK staying in the EU, it now puts odds at 40%.

The outlook has shifted because of an eventful week, where the law chief of Europe’s highest court advised that the UK should be able to reverse Brexit. The European Court of Justice on Tuesday proposed that Article 50 — the legal mechanism which kickstarted Brexit — allows the “unilateral revocation” of the UK’s intention to withdraw from the EU.

In a note on Wednesday, JPMorgan’s Barr cited the European Court of Justice proposal when he shifted the bank’s matrix of Brexit outcomes. Previously, the bank’s odds of various outcomes went like this: A so-called “no deal” — 20%; orderly Brexit (i.e. Brexit with a deal) — 60%; and staying in the EU — 20%. (They’re now at 10%, 50% and 40%, respectively.)

Read more: The UK economy could slump 8% into the worst recession since WWII after a no deal Brexit, Bank of England warns

“One of the issues about a second referendum has, in our view, …read more

Source:: Business Insider

      

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