UK: Its all about politics – Rabobank

Analysts at Rabobank point out that following a disastrous summit last week in Salzburg, when her Chequers deal was firmly rejected by European leaders, UK Prime Minister May convened her cabinet today.

Key Quotes

“Not only May faces a potential confrontation with her ministries, but the split within the Conservative party may widen further as Boris Johnson and David Davis – the leading Brexiteers – are set to be looking to endorse a Canada-style trade deal with the EU.”

“Speaking last week PM May sounded adamant that the Chequers plan is the only viable proposal and that the UK is prepared to leave the EU without a deal. Such a firm stance from both sides is part of negotiation strategy and that a compromise will eventually emerge five minutes to midnight.”

“While our baseline scenario of a “successful conclusion” of the Brexit talks to conclude in November prevails, we are not complacent about the risk of a hard Brexit if the current impasse prevails.”