Brexit remains – no pun intended – the most unpredictable political process in living memory. Since I last wrote about it, all the main points have come to fruition. Chequers was exposed as a charade. Theresa May has alienated even more Tories by pursuing a widely unpopular deal. A ‘Peoples Vote’ has gained some momentum, fuelled by pressure from Labour’s grassroots. Yet we are still barely any wiser. Anybody wanting clarity must wait.
Markets shift against Brexit following Starmer speech
So far as the markets are concerned, the takeaway from the Labour conference is that Brexit has become slightly less likely. Leaving on March 29th 2019, as Theresa May is adamant will be the case, drifted to 1.66, equivalent to a 66% chance. Another EU Referendum before 2020 shortened to 3.15.
Both moves were driven by Keir Starmer’s speech, declaring that ‘nobody has ruled out Remain’. Likewise it became apparent that Labour will vote against any deal, despite Jeremy Corbyn’s offer to work with the Tories towards a ‘sensible’ deal. Decoded, that means a deal that solves the Irish border impasse and reflects Labour priorities – frictionless trade, workers rights, environmental and consumer standards. A deal nobody expects any Tory leader to strike.
Labour right to prefer an election to referendum
Should bettors, however, be paying so much attention to the Labour position? It isn’t clear that they will be able to stop Brexit or that they would want to, if it involved taking a huge political risk. If as expected, May does not find agreement with the EU, there will be no deal to vote down in parliament and not enough time to legislate for a referendum before March 29th.