UK: Further extension of Article 50? - TDS

TD Securities analysts point out that the Article 50 has been extended to 31 October and if the UK PM May can't get her deal through Parliament later this month, TD analysts are seeing high risks of a further extension into 2020.

Key Quotes

“As we expected, EU27 leaders offered Theresa May a compromise Article 50 extension, shorter than the end-2019 or Mar-2020 deadline that many had expected. The UK now has until 31 October 2019 to ratify the Withdrawal Agreement. Should UK ratification occur before October, the UK will leave the EU on the 1st day of the month following.”

“When asked during the press conference, EU Council President Donald Tusk said that a further extension beyond 31 October could not be ruled out.”

“The Article 50 extension does not extend the transition period agreed in the Withdrawal Agreement. Thus, any A50 extension effectively cuts down time to agree a trade deal.”

“Supporters of a second referendum are likely to be disappointed by this agreement, as they think 9-12 months is required to hold another vote.”

“Political betting markets are little changed following last night's developments. May is now most likely to depart as PM between October and December (30%). The odds of a no deal Brexit sit at 14%, with a meaningful vote passing in 2019 at 66%.”