Brexit Bulletin: Boris in the Spotlight

(Bloomberg) -- Today in Brexit: Boris Johnson sets out his campaign as Labour moves again to block a no-deal departure.

What’s Happening?

Boris Johnson launches his push to become the next prime minister, vowing to lead Britain out of the European Union in October with or without a deal. 

It will be the first time the bookmakers’ favorite has faced public questioning for months, and investors will be listening carefully to gauge just how much appetite the former foreign secretary has for a no-deal Brexit. Is the threat of walking away a negotiating tactic and part of the strategy to win over the overwhelmingly euroskeptic Tory grassroots? Or is he serious?

“We must leave the EU on Oct. 31,” Johnson will say later today, according to his office. “We simply will not get a result if we give the slightest hint that we want to go on kicking the can down the road with yet more delay. Delay means defeat.”

Johnson has vowed to renegotiate the deal that Prime Minister Theresa May struck with EU leaders, saying he would withhold the divorce bill unless he wins more concessions. But he hasn’t laid out in much detail how he would overcome the obstacles that scuppered May’s efforts to deliver Brexit.

The main one wasn’t in Brussels. It was Parliament, and lawmakers are flexing their muscles. Labour, with some cross-party support, is trying once again to seize control of the parliamentary agenda as part of an attempt to keep May’s successor from pursuing a no-deal exit. Such maneuvers have worked in the past, and May ultimately concluded that Parliament wouldn’t let her leave without an agreement.

Brexit hardliner Dominic Raab has raised the prospect of suspending Parliament and exiting without a vote on whether to support a no-deal exit. Johnson is bound to be asked if he would consider such a controversial and high-risk gamble.

May herself warned her potential successors at Cabinet on Tuesday that they would face the same impasse she did in Parliament.

And in Brussels there’s no sign that the next prime minister would have more luck than May did getting the deal tweaked. European Commission President Jean-Claude Juncker told leadership rivals on Tuesday to drop the idea of revising the accord that was agreed to, and Irish Prime Minister Leo Varadkar said they shouldn’t assume that there’s a better offer on the table.

“That is a terrible political miscalculation and I hope that's not the one that is being made across the water,'' Varadkar said. “That really misunderstands how the EU works.”

Today’s Must-Reads

• Where does each candidate stand on Brexit? Here’s the rundown.
• The other leadership race: Who will take over as governor of the Bank of England? In the running is Raghuram Rajan, an outsider who’s used to navigating tricky politics. 
• European industry is in trouble and there’s a risk it will infect other parts of the economy, deepening the slowdown that’s already left the region fragile.

Brexit in Brief

Back a Winner | A new ComRes poll indicated voters were more likely to vote Conservative if Boris Johnson became the leader. The poll for the Telegraph — where Johnson is a columnist — showed the Tories winning a 140-seat majority in a general election with Johnson at the helm.

Javid’s Pitch | Home Secretary Sajid Javid is also launching his campaign today and will argue that Johnson is the wrong choice. “A leader is not just for Christmas, or just for Brexit. So we can’t risk going with someone who feels like the short-term, comfort-zone choice. We need tomorrow’s leader, today,” he will say. 

Fairy Stories | International Development Secretary Rory Stewart chose a circus tent on the bank of the River Thames to launch his campaign. He said the country stands at a crossroads, with a choice “on the one hand of fairy story, and on the other hand of the energy of prudence, of seriousness, of realism.” He addressed the “great prancing elephant in the room of this big circus tent” — a reference, he said, not to leadership favorite Johnson, but to a no-deal Brexit. 

EU Braces | The European Commission will once again remind member states and businesses that they must prepare for the worst. In the draft of a statement to be presented today, officials identify insurers and payment providers as being partially unprepared for a potential no-deal divorce at the end of October.

On the Markets | The pound fell this morning to $1.2724, partly because investors expect the next Bank of England move to be a cut in interest rates. Meanwhile, inflation expectations might be mispriced, writes Charlotte Ryan.

Avoiding the News | If you’re still reading, thank you. A new survey shows Britons are spurning the news because of Brexit. Thirty-five percent of respondents are avoiding the news, either because of frustration with Brexit or because it affects their mood, according to the Reuters Institute for the Study of Journalism Digital News Report 2019. So thanks for staying with us.  

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To contact the editor responsible for this story: Anne Swardson at aswardson@bloomberg.net, Leila Taha

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