British Prime Minister Theresa May faces her landslide defeat in the parliamentary vote 432-to-202 against her Brexit deal.

Charlene Vos

2019-01-27 12:39:00 Sun ET

British Prime Minister Theresa May faces her landslide defeat in the parliamentary vote 432-to-202 against her Brexit deal. British Parliament rejects the May deal for Brexit, so this outcome becomes the greatest defeat for a government initiative in British democratic history. Theresa May subsequently survives the parliamentary vote of no confidence that emerges from a tactical motion by the opposition Labour Party. There are at least 3 options for Brexit: the first option is the recent May deal with the European Union; the second option is an economically catastrophic no-deal Brexit; and the third option is the likely eventual cancellation of Brexit due to a second referendum. British Parliament now rejects the first option off the table.

Some British politicians suggest that the European Union may make some further concessions to the Brits, but the European Union reps are unlikely to fold in the current game of Brexit negotiations. The stock market response suggests that a second referendum on Brexit seems more likely than an economically detrimental no-deal. Stock market analysts tend to view the May defeat as a smooth transition toward Brexit delay.

As stock market investors perceive a no-deal Brexit to diminish in likelihood, the British pound gains momentum in recent times. In Britain, the main parties oppose one another and so demonstrate substantial division among themselves (whereas, U.S. congressional split runs broadly along partisan lines between Democrats and Republicans). Many May-led Conservative Party members want Britain to stay in the European Union; some want to consider another deal; and some want to leave the European Union without a compromise deal.

Labour Party whip leader Jeremy Corbyn prefers a second referendum on Brexit, and most party members cannot speak with one voice on the wider socioeconomic implications of the British divorce from the bloc. There can be a second referendum on Brexit only if British lawmakers face reality and risk reprisals from constituents who favor and expect Brexit.

Meanwhile, there is no absolute majority for any plausible option, and thus Britain now skids toward the default outcome of no-deal Brexit at the end of March 2019. The least-worse-case scenario would be a major delay of a few months. This delay would give stock market investors, firms, and financial intermediaries more time to tackle the next transition. From a global perspective, the best-case scenario might involve a second referendum on Brexit for Brits to remain in the European Union.

 


If any of our AYA Analytica financial health memos (FHM), blog posts, ebooks, newsletters, and notifications etc, or any other form of online content curation, involves potential copyright concerns, please feel free to contact us at service@ayafintech.network so that we can remove relevant content in response to any such request within a reasonable time frame.

Blog+More

Federal Reserve publishes its inaugural flagship financial stability report.

Peter Prince

2018-12-05 09:38:00 Wednesday ET

Federal Reserve publishes its inaugural flagship financial stability report.

Federal Reserve publishes its inaugural flagship financial stability report. Fed Chair Jerome Powell applauds both low inflation (2%) and low unemployment (

+See More

From crony capitalism to state capitalism, what economic policy lessons can we learn from Putin's reign in Russia?

Jonah Whanau

2018-03-13 07:34:00 Tuesday ET

From crony capitalism to state capitalism, what economic policy lessons can we learn from Putin's reign in Russia?

From crony capitalism to state capitalism, what economic policy lessons can we learn from President Putin's current reign in Russia? In the 15 years of

+See More

Mark Granovetter follows the key principles of modern economic sociology to analyze social relations and economic phenomena.

Charlene Vos

2023-02-21 08:27:00 Tuesday ET

Mark Granovetter follows the key principles of modern economic sociology to analyze social relations and economic phenomena.

Mark Granovetter follows the key principles of modern economic sociology to analyze social relations and economic phenomena. Mark Granovetter (2017) &

+See More

Goldman Sachs chief economist Jan Hatzius proposes designing a new Financial Conditions Index (FCI).

Chanel Holden

2018-07-19 18:38:00 Thursday ET

Goldman Sachs chief economist Jan Hatzius proposes designing a new Financial Conditions Index (FCI).

Goldman Sachs chief economist Jan Hatzius proposes designing a new Financial Conditions Index (FCI) to be a weighted-average of interest rates, exchange rat

+See More

Government intervention remains a major influence over global trade, finance, and technology.

Amy Hamilton

2023-08-31 10:22:00 Thursday ET

Government intervention remains a major influence over global trade, finance, and technology.

Government intervention remains a major influence over global trade, finance, and technology. Nowadays, many governments tend to eschew common ownership

+See More

President Trump nominates Jerome Powell to be the new Federal Reserve chairman.

Fiona Sydney

2017-10-03 18:39:00 Tuesday ET

President Trump nominates Jerome Powell to be the new Federal Reserve chairman.

President Trump has nominated Jerome Powell to run the Federal Reserve once Fed Chair Janet Yellen's current term expires in February 2018. Trump's

+See More