The UK and EU finalised a Brexit agreement on October 17 and British PM Boris Jonson will attempt to get it passed through Parliament on Saturday in what would be the fourth meaningful vote on an exit deal. A previous deal negotiated by Johnson's predecessor, Theresa May, was rejected by Parliament three times.
Bruno Verstraete, Partner, Lakefield Partners, said it would be difficult to say whether the deal will be cleared by parliament because of the politics involved. “However, the deal this time looks a bit more British (if I can call it like that) and the Labour Party cemented no-vote just after the new deal was announced. So it is going to be tricky to change course and say we are going to approve it,” he added.
The right time
“The only thing that plays to Boris Johnson’s advantage is the timing because everyone knows if there is no-vote, then there are only two possibilities -- either there will be a hard Brexit or there will be a demand for extension going into a second referendum and going into elections and that is something that Labour might not want to risk,” said Verstraete, adding that chances of approval for the deal are a bit higher knowing that the timing is against them and considering the political risk.
On must also remember that there are two parties involved -- one is the British parliament and the other is the European side which has indicated that they want go for another extension.
He said an extension would not be good for the market in the medium-term as it would add to the uncertainty. “If there is second referendum, there will be more uncertainty and the British economy has already suffered so much because they do not know whether it is a hard or soft Brexit, or an agreement. This uncertainty has blocked every investment in the UK so far,” he said.