Brexit Reversal More Likely After May's Confidence Vote: Goldman
Theresa May’s confidence vote may increase the possibility of a reversal of Brexit, says Goldman Sachs.
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Prime Minister Theresa May enjoyed a Pyrrhic victory last night, surviving an attempt by her own party to oust her. While it remains unclear how this Greek tragedy will play out, Goldman Sachs is of the view that her win reduces the likelihood “of a disorderly Brexit and increases the probability of a reversal of Brexit itself.”
Goldman said the party’s eurosceptic faction “holds much less sway across Parliament at large than its influence within the Conservative Party would suggest.” If the Prime Minister were to lose the vote on her tweaked Brexit deal, any subsequent legislation would likely reflect the preferences of a cross-party coalition of MPs looking for closer institutional ties, rather than those of Tory backbenchers advocating a more speedy EU departure.
While Conservative MPs may have shied away from removing May, it doesn’t mean that her Brexit deal will succeed, as the Prime Minister struggles to secure a better withdrawal agreement. Labour MPs, emboldened by support from Conservative rebels, may yet call for a parliamentary vote of no confidence, Goldman said, which could open the door to a second referendum.
To contact the reporter on this story: William Canny in Amsterdam at wcanny3@bloomberg.net
To contact the editors responsible for this story: Celeste Perri at cperri@bloomberg.net, Monica Houston-Waesch
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