Despite the early cabinet resignations and letters of no confidence we have seen, I think there is still a two in three chance that the PM will succeed in passing some form of withdrawal agreement through Parliament, and ultimately succeed in leaving the EU. This is likely because in spite of all the sabre rattling, angry threats and barely coded hints of rebellion, this is a dog that will bark but not bite.
Fearful of losing their seats in an election should the government collapse, most will timidly fall into line when the final analysis arrives. Brexiteers, recognising that Rome was not built in a day, will see that bringing down the PM risks a fresh referendum - a gamble that they are not willing to take. Better take what is on offer now and work to sever ties further with time.
Dissension on the Labour benches is more pronounced. The shadow Brexit secretary and leader of the opposition struggle to coordinate their messaging and as a consequence the government can expect a nice dose of Labour support for their plans.
On the basis that the Conservatives are the party of power, it’s likely that a general election is the least likely outcome of the next four months of machinations, at a probability of 20/1.
This leaves the fudge of a delay, backed by all 27 EU member states in order to negotiate a new arrangement - again unlikely, not least given the impending May elections to the European Parliament in which Britain will not be voting - also at a probability of 20/1.
Of the remaining options I would give a fresh referendum a 10/1 chance. If a deal looks unlikely this could be a neat way for the PM to hold onto power: Parliament can’t agree, so perhaps the public will have more luck. A no deal also comes in at 10/1.
Politically, I believe it’s 95% likely that this government will see out its term in office, running through to 2022 if at all possible. There is however a strong likelihood of a new PM, whether from the moderate or right of the party, but this will depend on the success of the Tory Brexit wing to gather around a single candidate who makes it through to the final two on the members ballot.
Of course in some ways none of this helps businesses.
Most will have sensibly planned based on the worst case for them - likely a no deal. They will have identified what this scenario is, established any critical business issues, developed a mitigation plan and determined when they might need to press the button.This is the only level headed approach to take in order to their protect stakeholders from a political process over which they will receive little advanced warning.
One thing is clear, British business should expect a further four years of minority government, an uncertain relationship with the EU and limited attention to domestic agendas.
Leaders should plan for a do nothing Parliament and direct their investments accordingly.
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