The Brexit Files: the possible permutations

The Brexit Files: the possible permutations

Here is a breakdown of what is meant to happen from here and what could happen from here.

The caveat being so far, Brexit, has not preceded in any forecasted or orderly direction for 3 years and looks even more precarious now. These permutations appear the most likely at this point in the Brexit cycle.

 1. Possible permutation - Timing
The UK departs from the EU aka Brexit on October 31. As it stands, even with the newly minted law that requires the PM to ask the EU for an extension, Brexit is due to be completed on October 31 deal or no deal. And, that is despite a Parliament majority that voted to block a no-deal Brexit, it technically can still happen from here.

Now, most believe the voted extension will be forced on the PM so the timing of Brexit is still up in the air.

However, don’t forget there are ‘two-parties’ in the Brexit negotiation; the UK and the EU. There is a general assumption the EU will just agree to granting the UK another delay; they very well may not. There are enough ‘noise’ coming from the continent that suggest the EU hasn’t seen any new or valid reasoning to delay Brexit any further. So, October 31 could be the start of Brexit officially despite the demands of Parliament.

2. Possible permutation – No Deal

Despite Parliament voting to block a no-deal Brexit and passing a law blocking it known as the ‘Benn Law’. The PM has repeatedly stated he would still try to see the departure of the UK from the EU on October 31.

There is growing evidence he could launch a legal challenge to the no-deal Brexit legislation in the Supreme and even the High Court. And further to permutation 1 there is also a suggestion the PM may send a letter to Brussels encouraging the EU Parliament to reject the extension that was made law by the Benn Act. This would illustrate Johnson commitment to a hard-line approach to Brexit as promised in his pre-election campaign and that a no-deal Brexit is something he is willing to take on.

3. Possible permutation – The Backstop

Conversely to his hard-line no-deal stance, the PM has asserted from the get-go he wants a ‘deal’ and that during the prorogation (suspension of Parliament) would continue last-ditch ‘talks’ with Brussels over possible ways to broker a deal over the biggest stumbling block to-date the Irish “backstop”.

The Northern Ireland border has been a point of contention since 1917, thus fixing it under the constraints of Brexit where never going to happen. However, the current proposal for the ‘backstop’ sees Northern Ireland and the rest of the UK for that matter remaining in a customs union with the EU. A hugely unpopular point with Brexiteers as it would mean the UK is technically still part of the customs union.

There is a growing belief the government is considering a compromise that would see the backstop moving to the Irish Sea on a customs basis allowing Northern Ireland to be a ‘floating entity’. This could placate the issues held by Brexiteers but
will be a huge point of contention on those wanting to keep the UK ‘whole’ in terms of law, let alone how this is viewed in Belfast and the rest of Northern Ireland.

4. Possible permutation – Going to the Poles

Although Parliament has just voted to defeat the PM’s bid to hold an early election twice, most state this was due to the fact a no-deal Brexit was still in play.

If, for arguments sake, Brexit was delayed or a hard Brexit was no longer possible, there are several parties that would possibly back a snap election.

Now, if the poles are to be believed Johnson’s Conservative Party still hold a sizable lead. It is entirely possible Johnson could see a majority come his way as Jeremy Corbyn is seen as almost unelectable, it would strengthen his mandate to lead the UK out of the EU and his own modus of operandi in the negotiations. It would make things very interesting.

Johnson would need a two-third majority in the Parliament to proceed to a snap election.

Interestingly enough, most believe this premutation is becoming a real possibility and that a general election will be held in November as it would be straight after the ‘delay’ is enacted.

The ‘spanner in the works’ question is: how will the Brexit Party (basically UKIP) and those pro-Brexit conservatives fare against those opposing Brexit and or calling for a second referendum? Both sides could cannibalise their voting constituency and we could end up in an even bigger mess on the floor of the Parliament as there is no
majority, no mandate and no path to Brexit or no-Brexit.

5. Possible permutation – Doing a Deal

If the speculation around the Irish “backstop” actually becomes ‘truth’ and then manages to appease both the EU and UK Parliaments, some legal and political experts suggest a finalised Brexit deal could struck and passed before October 19.

The reason for this permutation is the ‘tweaking’ of the ‘backstop’ issue would then probably allow the Brexit deal already negotiated between the EU and the UK to proceed. The very deal that was rejected time and time again under Prime Minster May’s premiership.

Seems unlikely but it is technically on the table.


6. Possible permutation - Referendum 2.0

Finally, that ‘Rainbow’ crossbench unites and votes to bring about a second referendum. If come October 19 the EU rejects all forms of changes, compromises and threats and this sees the prospect of a hard Brexit becoming a real possibility. The likes of the Liberal Democrats, the Scottish National Party and others could unite with a minority-led Labour government post a general election with a ticket to pass a bill proposing a second referendum. This is a long shot but considering all the other permutations and the twists and turns Brexit has taken over the past 3 years it’s not out of the question either.


« »



Start Trading
in Minutes

Open an account now

bullet Access +10,000 financial instruments
bullet Auto open & close positions
bullet News & economic calendar
bullet Technical indicator & charts
bullet Many more tools included

By supplying your email you agree to FP Markets privacy policy and receive future marketing materials from FP Markets. You can unsubscribe at any time.







Sitemap | © FP Markets 2019