UK Parliament begins to reveal its Brexit preferences

In a series of March 27 votes, we saw more support for softer Brexit options — but no resolution yet

Arnab DasTime to read: 10 min

The latest installment of the Brexit saga went into overtime again on the evening of March 27, as the House of Commons engaged in a first round of “indicative votes” on alternatives to UK Prime Minister Theresa May’s withdrawal deal. While the resolution remains uncertain, the contours of a way forward are finally starting to take shape based on voting preferences among the many alternatives put to an indicative vote.

We run through the key elements of the results; their probable implications for the shape of Brexit, the economy and the markets; and what to look out for next.

What happened in the House of Commons?

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Brexit uncertainty could last for another 21 months

The chances of a ‘no-deal’ Brexit have lessened, but the timeline to resolution has lengthened

Arnab DasTime to read: 4 min

The latest installment of the Brexit drama offers good and bad news for investors in UK assets and beyond: The good news is the risk of a “no deal” Brexit has receded, but the bad news is it’s still a possibility and the timeline toward resolution is now more extended. This means that persistent uncertainty is likely to continue to weigh on the UK and wider European economies, and may elevate the volatility of UK asset markets, particularly the currency.

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What’s next for Brexit?

After the dramatic defeat of the UK Prime Minister’s EU withdrawal plan, we see five scenarios for the future EU-UK relationship.

Arnab DasTime to read: 6 min

Yesterday, Parliament rejected UK Prime Minister Theresa May’s Brexit Withdrawal Bill by a 230-vote margin — the largest defeat of legislation in nearly 250 years, when Parliamentary records began.1 That the defeat exceeded consensus by as much as 100 votes reflects the depth and breadth of dissatisfaction with May’s Brexit plan. Many Members of Parliament (MPs) fear it could further undermine the economy, contribute to secession in Northern Ireland or Scotland, or might not confer the freedom for which Brexiters campaigned in the referendum.

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