Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

JPMorgan raises its Brexit no-deal probability forecast to 25 from 15%

Published 21/05/2019, 14:38
Updated 21/05/2019, 14:38
© Reuters. FILE PHOTO: A J.P. Morgan logo is seen in New York City

© Reuters. FILE PHOTO: A J.P. Morgan logo is seen in New York City

By Guy Faulconbridge

LONDON (Reuters) - U.S. investment bank JPMorgan (NYSE:JPM) raised its probability of a no-deal Brexit to 25 from 15%, saying its base case is that Boris Johnson becomes prime minister, followed by a general election and then another delay to Britain's exit to the end of the year.

JPMorgan raised the probability of an Article 50 extension to 60 versus 50% before and cut the probability of exit on the terms of Prime Minister Theresa May's Withdrawal Agreement to 15 from 35%.

In a research note to clients titled "Brexit: Time to be afraid, as 'no deal' probability rises", JPMorgan's Malcolm Barr said the base case was that Johnson became prime minister in early September.

"Boris Johnson becomes PM in early September on a 'no deal if we have to' platform," Barr said. "The EU refuses his central objective of removing the backstop from the Withdrawal Agreement."

"The Commons begins the process of legislating to force Johnson to seek an Article 50 extension, and Johnson calls a general election seeking a mandate for his approach," the note added.

"The UK and EU agree to extend Article 50 to end-December to allow time for the general election to take place and for discussions to follow it."

Nearly three years after the United Kingdom voted 52 to 48% in a referendum to leave the EU, it remains unclear how, when or even if it will leave the European club it joined in 1973. The current deadline to leave is Oct. 31.

© Reuters. FILE PHOTO: A J.P. Morgan logo is seen in New York City

Britain’s labyrinthine crisis over Brexit has stunned allies and foes alike, and with deadlock in London, the world's fifth largest economy faces an array of options including an exit with a deal to smooth the transition, a no-deal exit, an election or a second referendum.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.