Global Macro Service > Research Briefings > United Kingdom

Brexit compromise takes shape but risk of ‘no deal’ rises

A deal on the Brexit withdrawal agreement still looks more likely than not. The likely compromise on the Irish border appears to be supplementing the “backstop” with a UK-EU customs union agreement. There is a good chance this would remain in place well beyond the end of any transition period. But whether or not such a plan would gain parliamentary approval remains very uncertain and it may take more than one vote – and for it to be made clear that “no deal” is the only alternative – for the government to secure a majority. Given this uncertainty, and the fact that time is rapidly running out, we estimate that the probability of a disorderly Brexit in March 2019 has risen to 20%.

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