Brexit: UK enters dangerous ‘game of chicken’ with EU

House of Commons votes increases prospect of no-deal outcome, says Goodbody Stockbrokers

  REQUIRED: Handout photo issued by the House of Commons of Commons Leader Andrea Leadsom, Chancellor Philip Hammond, Prime Minister Theresa May, Brexit Secretary Stephen Barclay and International Trade Secretary Liam Fox, following the results of voting on Amendments put forward by MPs over the Government’s Brexit deal, in the House of Commons, London.

REQUIRED: Handout photo issued by the House of Commons of Commons Leader Andrea Leadsom, Chancellor Philip Hammond, Prime Minister Theresa May, Brexit Secretary Stephen Barclay and International Trade Secretary Liam Fox, following the results of voting on Amendments put forward by MPs over the Government’s Brexit deal, in the House of Commons, London.

 

The UK may be entering a dangerous “game of chicken” with the EU after last night’s Brexit votes, Goodbody Stockbrokers has warned.

UK MPs last night voted down a proposal in parliament that aimed to prevent a potentially chaotic “no-deal” Brexit while supporting an amendment to renegotiate the Irish backstop.

“ The UK Parliament and the EU now appear to have taken incompatible positions on the issue of the Irish Border backstop,” Goodbody Stockbrokers analyst Dermot O’Learysaid.

“ We have been here before, but not when the crash of a no-deal exit is so close,” he said.

“One of the frequent criticisms levelled at the UK House of Commons is that it has been able to state what it doesn’t want but not what it does,” Mr O’Leary said

Meanwhile British businesses are likely to accelerate their planning for a no-deal Brexit following last night’s votes , the head of the Confederation of British Industry (CBI) has said.

Carolyn Fairbair said she did not think any company would have taken reassurance from the events on Tuesday, when MPs signalled they did not want to leave the European Union without a deal, but also ordered Theresa May to demand better terms for leaving.

“I don’t think there will be a single business this morning who is stopping or halting their no-deal planning as a result of what happened yesterday, and I fear they may even be accelerating it,” Ms Fairbairn told BBC Radio. “The amendment feels like a real throw of the dice.”

Less than two months until the United Kingdom is due by law to leave the EU, investors and allies are trying to gauge where the Brexit crisis will ultimately end up with options including a disorderly Brexit, a delay to Brexit or no Brexit at all.

Two weeks after voting down prime minister Theresa May’s Brexit deal by the biggest margin in modern British history, parliament demanded she return to Brussels to replace the so-called Irish backstop, an insurance policy that aims to prevent the reintroduction of a hard border between Ireland and Northern Ireland.

“There is limited appetite for such a change in the EU and negotiating it will not be easy,” Mrs May told MPs who voted 317 votes to 301 to support the plan, which had the backing of influential Conservative lawmaker Graham Brady. “I agree that we should not leave without a deal. However, simply opposing no deal is not enough to stop it,” said Mrs May, an initial opponent of Brexit who won the top job in the chaos following the 2016 referendum. - Additional reporting by Reuters