Brexit Bulletin: Blue Monday

Brexit is 31 days away.

(Bloomberg) --

Today in Brexit: Johnson’s Tories vow to “Get Brexit Done” while allegations swirl around the prime minister.

What’s happening? This is the week Boris Johnson hopes to unite the Conservative Party behind his plan for Brexit and send proposals for a revised deal to Brussels. It begins with the prime minister fending off allegations of sexual impropriety and plots to oust him.

As Johnson’s Tories meet for their annual conference, Downing Street has been forced to deny a historical allegation of groping made by a journalist in the Sunday Times, and to sidestep accusations over his professional and personal relationship with an American businesswoman while mayor of London.

The action in Manchester kicked off on Sunday with speeches from key Brexiteers Michael Gove and Jacob Rees-Mogg. Gove conceded there would be “challenges” and “turbulence” if the no-deal outcome he is preparing for comes to pass. Rees-Mogg praised Brexit Party leader Nigel Farage and described opposition plots against Johnson as a “Remoaner coup.”

About that “coup.” In Westminster, the so-called Rebel Alliance of opposition parties will meet on Monday as Parliament is staying open while the Tories meet in Manchester. Among their options is a vote of no-confidence in Johnson; if they defeat him they will have two weeks to form an alternative government. Labour’s Margaret Beckett is emerging as a leading candidate to be a caretaker prime minister, Robert Peston of ITV News reported on Sunday.

But it’s a dangerous gamble, Bloomberg’s Robert Hutton and Kitty Donaldson write from Manchester: If the parties don’t agree, Johnson would get the general election he wants. With parliament broken up, MPs would have no power to stop a no-deal Brexit on Oct. 31.

Today’s Must-Reads

• How does the EU rate the chances of a deal? Bloomberg’s Ian Wishart has the essential guide to the state of play.
• The internet is alive with speculation that Johnson’s policies are being driven by hedge funds looking to profit from a no-deal Brexit. But there’s no evidence for that at all, former banker Frances Coppola writes for Forbes. 
• The Conservative Party of Peel, Churchill, and Thatcher is fading, Matthew D’Ancona wrote for Tortoise over the weekend. It is fast becoming the party of Boris, he argues — and of Steve Bannon.

Brexit in Brief

What If | Speculation continued to swirl that Johnson might seek a way around the law that requires him to request an extension if a deal hasn’t been agreed by Oct. 19. But Justice Secretary Robert Buckland took a veiled swipe at Johnson’s advisers, saying respecting the law is an “iron rule.”

Say What? | Johnson is shutting out long-time advisers Sir Lynton Crosby and Will Walden and is instead taking counsel only from his chief aide Dominic Cummings and his partner Carrie Symonds, The Sun reports. 

DUP Stands Firm | Democratic Unionist Party Leader Arlene Foster said Northern Ireland must leave the EU on the same terms as the rest of the United Kingdom. Speaking at a fringe event in Manchester, Foster was asked whether she’d countenance a Brexit deal that involves different treatment for Northern Ireland beyond agricultural checks, and whether she could accept Northern Ireland staying in both the EU and U.K. customs areas. “No to all of that,” she replied.

Coffers Full | Tory donors have been in good form since Johnson entered Downing Street, with party coffers now “flush” with cash ahead of an election campaign, the Financial Times reports. Although traditional donors in the City of London are wary about Brexit, they have been replaced by hedge fund managers and pro-Brexit entrepreneurs, the FT reports. 

Gloomsters | British businesses are growing increasingly gloomy about the economy as Brexit approaches, according to the Lloyds Business Barometer. September’s survey showed that 43% of businesses now expect a negative impact from Britain’s departure from the European Union, up from 39% a month earlier. 

Doomsters | Pound traders are ready for what is now an annual week of volatility. “The Tory party conference is probably the single most important event for sterling next week,” said Ned Rumpeltin, European head of currency strategy at Toronto-Dominion Bank. 

City Braced | The City of London is concerned about the uncertainty of Brexit, the financial district’s top lobbyist told Bloomberg, while insisting that London’s big financial players are as ready as they can be. Some Labour party policies “need a little more thinking through,” Catherine McGuinness said. 

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To contact the editor responsible for this story: Caitlin Morrison at cmorrison59@bloomberg.net, Leila Taha

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