UK: Article 50 extension and election remain highly likely – ING

James Smith, developed markets economist at ING, suggests that in the UK, the numbers in Parliament still appear stacked against a deal - making it unlikely that the prime minister will be able to get one before the 19 October deadline.

Key Quotes

“Beyond then, the prime minister would be obliged to seek an Article 50 extension from the EU. And while there have been suggestions that the prime minister could ignore this obligation, the Supreme Court’s unanimous verdict this week serves a reminder that the courts would probably quickly step in.”

“Our base case, therefore, remains that the UK is headed for a general election – the question remains ‘when’ and 'how'.”

“Opposition leader Jeremy Corbyn has indicated that he won’t trigger a vote of no confidence in the government this week – and is unlikely to do so until an Article 50 extension has been secured. Assuming that a delay is secured some time in mid-October though, then an election could feasibly take place in early/mid-December. We’d assume there would be a desire to get it out of the way before Christmas in any case.”