Interview, Fireside Chat, Webinar
Brexit: Live Q&A with The Economist
- A "no deal" exit on October 31 is deemed highly unlikely, with an EU extension of three to four months expected unless a "miraculous" legislative event occurs within the next two days, as the 27 EU governments prefer an extension over disorder and may demand the time be used for specific democratic events rather than further discussion.
- The legislative path for the Withdrawal Agreement is projected to be "very complicated" and take many years, with a vote on Saturday blocked by an amendment and the Speaker ruling out a vote today, while the House of Lords will further prolong the process, making it "not likely" that legislation will be passed by the October deadline.
- An election is considered "more likely" than a second referendum and is predicted to occur in the "early part of next year" rather than winter, as the government currently lacks a majority, polls are volatile, and resistance to a second referendum remains strong in the Commons.
- In a potential election, the Conservative Party is expected to secure roughly 35% of the vote share, which is insufficient to guarantee a majority and could result in a hung parliament, potentially leading to a coalition or a "government of national unity" involving Labour, the Scottish Nationalists, and the Liberal Democrats.
- A second referendum is viewed as a growing possibility if an election fails to resolve the gridlock, a sentiment that may intensify political pressure, while the Labour Party is shifting toward requiring a referendum as a condition for any future deal.
- Significant political risks include the potential for Boris Johnson to suffer damage to his career and party if he fails to deliver Brexit, alongside heightened pressure for Scottish independence triggered by Irish Sea border controls, which may cause Nicola Sturgeon to campaign vigorously for another independence referendum.
- Economic forecasts suggest the pound will decline long-term due to increased trade friction and predicted falls in investment over the next few years, as the Netherlands, France, and Ireland gain company headquarters and fund managers from London, which will remain the largest financial center.
- Future trade relationships face constraints, with the EU likely rejecting UK deregulation to prevent a "race to the bottom," while free trade deals with third countries like the US, China, or India are expected to take many years and yield economic gains "much smaller" than pro-Brexit claims, with losses from EU barriers exceeding any new gains.
- The UK will end the free movement of people, introducing a new visa or work permit regime for EU citizens, while general tourism and travel will remain unaffected, though the overall Brexit outcome is expected to contribute to a "gloomier" global economic scenario amidst US-China tensions and IMF downgrades.
- While the government maintains confidence in leaving by October 31, this is characterized as a "mistake" as time has run out, and the European Union is expected to accept only the first official letter as legally binding, disregarding subsequent correspondence, even if courts later rule the signature issue on the letter is compliant with the Act.