LONDON (Reuters) – US investment bank JP Morgan said on Wednesday that the chances of Britain abandoning its divorce from the European Union may have been further called into question after Prime Minister Theresa May's series of humiliating defeats in parliament the block and sent Sterling higher.
British pro-Brexit Trade Minister Liam Fox also said it was now possible that a Brexit would not take place. There was a real danger that Parliament would try to "steal" Brexit from the British people, Fox said on Wednesday to a parliamentary committee.
In one of the biggest shifts in perceptions since the EU shock of 2016, JP Morgan has increased the likelihood that Britain will eventually stay from 20% to 40%.
Since the referendum, investors have speculated that the biggest economic and political turnaround in the UK since the Second World War could ultimately be thwarted, though the mechanism could not be clarified.
"The UK now seems to have the ability to unilaterally revoke and take a period of time to decide what will happen next," wrote economist Malcolm Barr of J.P. Morgan in a message to the customers.
He set a 1
Although the opinion of Advocate General Sanchez-Bordona is non-binding, the ECJ has yet to decide that Brexit will not proceed as planned on 29 March.
Silvia Dall & # 39; Angelo, Senior Economist at Hermes Investment Management, gave a similar assessment as JP Morgan.
"Following the blows of defeat to the Prime Minister in the House of Commons yesterday, the European Court of Justice's news that the United Kingdom could unilaterally repeal Article 50 did not make Brexit a more realistic option."
"The government has previously denounced this path, but the road to Brexit is increasingly dependent on the ability of financial markets and companies to advance the government," he wrote in a note.
The pound sterling seen in the Brexit referendum since the referendum hit a 17-month low on Tuesday, but recovered much of its overnight losses on Wednesday as optimism grew that the UK was the EU may not leave without a deal.
VOTING RETURN POSSIBLE
In the referendum of 23 June 2016, 17.4 million voters or 52 percent supported Brexit, while 16.1 million or 48 percent supported the block.
In order to leave the EU on the terms negotiated in May, she needs the parliament to approve her deal. This looks unlikely.
In major defeats on Tuesday, their government was disrespected by parliament, and a group of their own Conservative MPs won the challenge of giving more power to the lower house if their deal was rejected. A final vote is due on December 11th.
If May loses, the future of the fifth largest economy in the world is uncertain. She warned that Britain could go without a deal or that there could be no Brexit at all.
J.P.. Morgan said a second referendum seemed more likely than a parliamentary election to thwart Brexit.
Brexit supporters have said that the United Kingdom would be in a constitutional crisis if Brexit is reversed, as the financial and political elite will have thwarted people's democratic will.
But many business leaders and investors fear a chaotic Brexit that they claim would weaken the West, shake the financial markets, and mess up the arteries of commerce.
Report by Guy Faulconbridge; Editing by Angus MacSwan