Investment firm Goldman Sachs increases No-deal probability forecast by a third

The multinational investment firm Goldman Sachs has increased it’s prediction for the probability for a no-deal Brexit by a third, to 15%, following Prime Minister Theresa May’s resignation announcement yesterday.

The firm had previously predicted a 10% likelihood of the United Kingdom crashing out of the European Union without a deal, however due to recent election successes believed to be accrued by the Euro-sceptic Brexit Party, and the possibility of a hard-Brexit supporting Prime Minister at Number 10 by mid-June, Goldman Sachs has since revised their estimate.

The probability of no-deal is now as high as the estimate was in April earlier this year, when the probability was cut due to the extension of article 50 by Theresa May’s Government to free up more time to work out a formal withdrawal agreement, of which 3 versions of said agreement were put before Parliament and subsequently rejected. 

An Economist for Goldman Sachs, Adrian Paul, has stated that the firm still expects an “orderly EU withdrawal in late 2019 or early 2020”, but that the organisation’s “conviction” is lowered due to recent events. 

Brexit predictions were thrown into disarray yesterday as Prime Minister Theresa May announced that she would be resigning from the role as soon as the middle of next month, and that processes to elect a new leader of the Conservative Party are to begin next week.

Many are placing current Backbench MP Boris Johnson, who has a considerable popularity within the party’s more radical elements for his support for a hard-Brexit, as the most likely candidate to score enough points within the Conservative membership base to be elected as the next Prime Minister. 

This has prompted a civil war within the Conservative Government, as many prominent Ministers of Parliament have either come out in support, or in direct opposition with the potential Prime Minister. 

Mr Paul also clarified that while it was unlikely for the current Parliament to push forward a popular no-deal vote the performance of the Brexit Party, and the potential for having a Hard-Brexit supporting Prime Minister, opens up the possibility for a second referendum vote to have the option of including a choice of “no-deal” on the ballot for the public to decide, which would drastically increase the odds that the United Kingdom, emboldened by a popular vote, would crash out of the European Union onto World Trade Organisation terms. 

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