Britain's Theresa May heads to Brussels for Brexit crisis talks

LONDON (AFP) – British Prime Minister Theresa May on Tuesday (Feb 19) prepared to head to Brussels for talks on the Brexit crisis, even though EU leaders have refused any renegotiation of the deal she agreed with them in December.

With just five weeks to go until Brexit on March 29, the deal has been blocked by the British parliament and the country appears headed for a chaotic exit that economists warn will wreak havoc in both Britain and the European Union.

May is due to meet European Commission chief Jean-Claude Juncker at 1730 GMT on Wednesday (1.30am on Thursday, Singapore time), two days after Brexit Secretary Stephen Barclay and Attorney-General Geoffrey Cox visited the EU headquarters.

The visit also comes a day before Jeremy Corbyn, leader of the opposition Labour Party, is expected to meet the EU’s Brexit negotiator Michel Barnier as part of a diplomatic ballet aimed at heading off a no-deal Brexit.

May’s spokesman said the prime minister was “working hard to secure legally binding changes” to the backstop – a controversial part of the withdrawal agreement she signed with EU leaders at a summit in December.

The backstop would keep Britain in the EU customs union and give Northern Ireland a different economic status from mainland Britain until a way is found to ensure there is no return to a hard border with EU member Ireland.

The deal was overwhelmingly rejected by British MPs last month in a vote that united Conservative pro-EU moderates and Brexit hardliners in opposition.

May has since said she will seek to renegotiate the deal to the dismay of European allies who have repeatedly warned her against using time pressure in an attempt to extract concessions.

“The EU need to work with us in order to give parliament the insurance it needs,” May’s spokesman said, adding: “The prime minister believes that she can secure changes in relation to the backstop MPs want – there is a majority in parliament for a deal”.

May’s critics accuse her of wasting time before holding another vote in parliament on her deal, hoping that the looming deadline will change MPs’ minds.

‘RUNNING DOWN THE CLOCK’

Speaking at a manufacturing conference in London, Corbyn said May was being “extraordinarily reckless” in her Brexit strategy.

“This government is running down the clock,” he said.

The Labour leader promised that his party would “keep all options on the table, including the option of a public vote”.

A lifelong eurosceptic, Corbyn has come under intense pressure from within his party to push more forcefully for a second referendum.

He has instead urged May to agree to negotiate for Labour’s Brexit plan, which would involve agreeing to Britain staying permanently in the EU customs union.

EU leaders have repeatedly said they will not renegotiate the legally-binding withdrawal agreement but could make changes to an accompanying political declaration with more long-term trade aims.

“We cannot accept a time limit to the backstop or a unilateral exit clause,” Juncker’s spokesman Margaritis Schinas said on Tuesday.

But former European Commission president Jose Manuel Barroso told a Euronews Brexit conference in London that the EU could pull off an “impossible” compromise.

“It is possible, with some creativity and imagination, to find some kind of compromise,” he said. “There is still some room for negotiation.”

He added that “the European Commission has a remarkable capacity to find compromises that seem impossible until they are done.”

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EU's Juncker, Britain's May to meet on Brexit on Wednesday

BRUSSELS (Reuters) – British Prime Minister Theresa May will travel to Brussels on Wednesday for more talks with European Union officials, part of a renewed push to get her Brexit deal passed by parliament.

Meetings between EU and British officials in recent days have yet to produce a breakthrough after the British parliament resoundingly defeated the divorce deal May agreed with the EU in November.

The main sticking point was the so-called backstop, an insurance policy to prevent the return of a hard border between EU-member Ireland and the British province of Northern Ireland.

“The EU 27 will not reopen the withdrawal agreement, we cannot accept a time limit to the backstop or a unilateral exit clause,” said Margaritis Schinas, spokesman for the EU’s executive European Commission.

“Further talks will be held this week to see whether a way through can be found that would gain the broadest possible support in the UK parliament and respect the guidelines agreed by the European Council,” he told a news briefing.

“We are listening and working with the UK government to see how we can work for an orderly withdrawal of the UK from the EU on March 29.”

Britain’s Brexit Secretary Stephen Barclay is also due in Brussels mid-week for more talks with the bloc’s Brexit negotiator Michel Barnier.

The EU says the backstop is essential for peace and prosperity on the island of Ireland.

But it is strongly contested in Britain where eurosceptic critics fear it would trap the country in EU rules indefinitely, undercutting a key Brexit promise of pursuing an independent global trade policy.

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British supermarkets battle to secure stocks as chaotic Brexit looms

LONDON (Reuters) – Britons could face shortages of fresh food, price rises and less variety if the country leaves the European Union next month without agreeing trade terms, food industry officials say.

With no deal in sight as Britain’s March 29 exit date approaches, supermarkets are stockpiling, working on alternative supplies and testing new routes to cope with an expected logjam at the borders but say they face insurmountable barriers.

“You can’t stockpile fresh produce, you haven’t got any space and it wouldn’t be fresh,” said Tim Steiner, head of online supermarket pioneer Ocado.

The warnings, including talk of whether rationing would be needed, are part of a chorus of concern from businesses who say they are weighed down by uncertainty in what was once considered a bastion of Western economic and political stability.

The last time Britain’s food supplies were seriously hit was when fuel protests prompted panic buying almost two decades ago, forcing some supermarkets to ration milk and bread and others to warn that stocks would run out in days.

Executives within the food chain said Britain was better prepared than 2000, but disruption may be more widespread and last longer than the few days it took before the fuel dispute was settled.

James Bielby, head of the Federation of Wholesale Distributors, says its members’ retail and catering customers were asking for between one and eight extra weeks’ supply. But storage is limited in an industry that operates on a “just in time basis” to maximize the shelf life of goods.

Intense competition and slim margins in the British supermarket sector have also made contingency planning more complicated. James Walton, chief economist at IGD which works with the industry to improve supply chains, said storage had been reduced over many decades to hold down working capital.

What remains is now full. “So surplus space within stores is being used and containers are in carparks,” he said.

Mike Coupe, the boss of Britain’s second biggest supermarket Sainsbury’s, said supplies would not last long. “We don’t have the capacity and neither does the country to stockpile more than probably a few days’ worth,” he said in January, echoing the supermarket’s warning to then-Prime Minister Tony Blair in 2000 during the fuel crisis.

LET THEM EAT LEEKS

Britain imports around half of its food, and while some is flown in via air freight, most enters on lorries through Dover, Britain’s main gateway to Europe.

At peak times, 130 lorries a day are required to drive through Dover bringing citrus fruit alone, according to the British Retail Consortium. In March, inclement British weather means 90 percent of lettuces come from the EU.

If it leaves without a trade deal, Britain will move on to World Trade Organization rules that require tariffs to be paid, goods to be checked and paperwork to be completed, demands that do not currently exist for goods coming from within the EU.

The English Apples & Pears group said British farms have been asked to provide more apples until the end of April by retailers who usually source more from the southern hemisphere from March.

Other substitutions are more difficult.

“People just say we’ll eat more British produce but … would people be happy to start eating tonnes of British leeks? I’m not sure,” said an executive at one of Britain’s four major supermarket groups, who declined to be named because of the possible business impact.

“We have to plan for the worst,” he said, before adding that he hoped Britain would delay its departure date from the EU.

“BUNKER LINES”

Consultants, suppliers, company sources and trade groups said importers were looking at securing new routes into Britain in case customs checks clog up Dover, but no other port offers that frequency of ferry sailings or trains through the tunnel.

They would also have to compete with companies importing drugs, car parts and chemicals that are also looking to alternative ports on the south and east coast of Britain.

The Spanish wine federation said they had advised members to avoid shipping goods to Britain around the end of March.

Supermarkets could fly in more goods – as they did to bring in lettuces from America in 2018 when bad weather hit European supplies – but it is expensive and capacity is limited.

William Bain, a policy adviser at the British Retail Consortium, said clients and suppliers were having talks now to discuss how costs and risks would be shared if stock is delayed.

Elsewhere in the food chain, suppliers of ready meals are considering changing ingredients to remove those with the shortest shelf life, according to the Fresh Produce Consortium.

All of these changes could lead to higher prices however, with changes to recipes requiring changes to labeling.

Dominic Goudie, in charge of exports, trade and supply chains at the Food and Drink Federation, told Reuters prices were likely to rise, regardless of the outcome.

“We know from our members that they are investing staggering sums into getting ready for the worst possible no-deal scenario,” he said. “The sums are so large that manufacturers need to pass it on to their customers, the retailers.”

Another senior executive at a major British food retailer told Reuters they had seen no signs yet of Britons buying so-called ‘bunker lines’ – toilet paper, bottled water and tinned food. But it could happen before March 29.

“If you’ve got a limited amount of food, you want to distribute it fairly across the country,” he told Reuters. “So you almost get to this ridiculous notion of rationing.”

Some of Britain’s deeply-divided politicians who are seeking a complete break with the EU say the economy would soon recover from any short-term hit as it adapts to new trading routes after Brexit.

They argue that talk of food shortages and rationing is scaremongering driven by the government to rally support for Prime Minister Theresa May’s proposed Brexit deal, agreed with the EU but showing little sign of getting sufficient support from her own parliament.

Environment minister Michael Gove, who backed Brexit, has said leaving without a deal could lead to higher prices, but that the government has chartered extra ferries to maintain the movement of goods. “We are meeting weekly with the food industry to support their preparations for leaving the EU,” a spokesman said.

Tesco chairman John Allan said the retailer, Britain’s biggest with 3,400 stores and almost 28 percent of the market, was stockpiling goods with a long shelf life but that its options for fresh produce was more limited.

“So provided we’re all happy to live on Spam and canned peaches all will be well,” he added.

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Seven lawmakers quit UK Labour Party citing Brexit 'betrayal', anti-Semitism

LONDON (Reuters) – Seven Labour lawmakers quit on Monday over leader Jeremy Corbyn’s approach to Brexit and a row over anti-Semitism, saying Britain’s main opposition party had been “hijacked by the machine politics of the hard left”.

In a direct challenge to Corbyn, the seven centrist MPs said they were courting others from across parliament to join their group, saying “enough is enough” in keeping silent over their doubts about the Labour leader’s fitness for office.

United by a desire for a second referendum on Britain’s decision to leave the European Union, they acknowledged that their resignations would not change the arithmetic in parliament, where there is as yet no majority for such a vote.

But their move underlines the increasing frustration within Labour over Corbyn’s reluctance to change his Brexit strategy – the leftist leader and long-time critic of the EU has stuck to his preference for a new election or his plan to leave the bloc.

With only 39 days until Britain leaves the EU, its biggest foreign and trade policy shift in more than 40 years, divisions over Brexit have fragmented British politics, breaking down traditional party lines and creating new ad hoc coalitions.

“The Labour party we joined that we campaigned for and believed in is no longer today’s Labour Party … it has now been hijacked by the machine politics of the hard left,” lawmaker Chris Leslie told a news conference.

“Evidence of Labour’s betrayal on Europe is now visible for all to see. Offering to actually enable this government’s Brexit – constantly holding back from allowing the public a final say.”

The seven lawmakers are Leslie, Luciana Berger, Angela Smith, Gavin Shuker, Chuka Umunna, Mike Gapes and Ann Coffey. They will continue to sit as members of parliament under the banner “The Independent Group”.

Corbyn expressed his disappointment that the group had left, referring in a statement to “Labour policies that inspired millions at the last election” when the opposition party saw its biggest increase in vote share since 1945 to win 262 seats.

His finance policy chief, John McDonnell, called on the lawmakers to “stand down” and try to win back their seat in parliament. The local branch for Labour in Umunna’s constituency asked him to call a so-called by-election.

But the party’s deputy leader, Tom Watson, described the resignations as a “wake-up call”, saying “unless we change we may see more days like this” – a guarded suggestion that Corbyn and his team had taken Labour too far to the left.

ENOUGH IS ENOUGH

Britain’s 2016 EU referendum, when 52 percent voted to leave versus 48 to remain, has split not only British towns and villages but also parliament, with both Conservative and Labour leaders struggling to keep their parties united.

Eurosceptics in Prime Minister Theresa May’s Conservative Party flexed their muscle by voting against her government in a symbolic Brexit ballot last week though have so far given little sign of formally breaking away.

But lawmakers in the new Labour independent grouping may hope to tempt away some pro-EU members of the governing party.

“We believe that the entire political system is now broken … We’ve had enough evidence to suggest that people out there will come forward, register their support and help us… build a new political movement,” Angela Smith said.

Corbyn has so far stuck to Labour policy to keep the option of a second referendum “on the table” if May’s government fails to secure a deal with Brussels that can break an impasse in parliament, preferring a new election or his own proposed deal.

The prospect of holding a second referendum poses a dilemma for Corbyn: while many of the party’s members fervently back a so-called People’s Vote, others just want Britain to leave as soon as possible.

But it was clear that for the seven lawmakers, Corbyn’s wider beliefs had spurred them to leave the party.

Corbyn has cemented a shift to the left in Labour, taking control of a party that, under former prime minister Tony Blair, moved to the centre to win and retain power for 13 years.

Some accused Corbyn of failing to tackle anti-Semitism in the party, an allegation that has dogged the Labour chief, a supporter of Palestinian rights and critic of the Israeli government, since he took over the party in 2015. Corbyn denies the allegation, saying he is stamping anti-Semitism out.

Luciana Berger, a Jewish lawmaker who has faced abuse, said the party had become “institutionally anti-Semitic”.

For others, Corbyn was just not up to the demands of his office, they said. Mike Gapes said it was now a question of lawmakers’ moral integrity whether to stay in Labour.

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Honda to close UK car plant with the loss of 3,500 jobs

LONDON (Reuters) – Japanese carmaker Honda is set to announce the closure of its only British car plant in 2022 with the loss of 3,500 jobs, a lawmaker told Reuters, in the latest blow to the UK car industry as Brexit approaches.

Honda built just over 160,000 vehicles at its Swindon factory in southern England last year, where it makes the Civic and CV-R models, accounting for a little more than 10 percent of Britain’s total output of 1.52 million cars.

But it has struggled in Europe in recent years, and the industry faces a number of challenges including declining diesel demand and tougher regulations alongside the uncertainty over Britain’s departure from the European Union, due next month.

Justin Tomlinson, a Conservative lawmaker for Swindon who voted for Brexit in 2016, said he had met with the business minister and representatives from Honda who had confirmed the plans.

“They were due to make a statement tomorrow morning, it’s obviously broken early,” Tomlinson, lawmaker for North Swindon, told Reuters.

“This is not Brexit-related. It is a reflection of the global market. They are seeking to consolidate production in Japan.”

Honda said it would not be providing any comment at this stage.

Japan has repeatedly warned it could pull investments in Britain, which it had seen as a gateway into Europe, if London does not secure a Brexit deal favorable for trade.

The recently agreed EU-Japan trade agreement means tariffs on cars from Japan to the continent will be eliminated, while Britain is struggling to make progress on talks over post-Brexit trade relations with Tokyo.

Honda’s announcement would come just over two weeks after rival Japanese carmaker Nissan canceled plans to build its X-Trail sport utility vehicle in Britain.

“The car industry in the UK over the last two decades has been the jewel in the crown for the manufacturing sector – and now it has been brought low by the chaotic Brexit uncertainty,” said Des Quinn, national officer for the automotive sector at Britain’s biggest trade union Unite.

Honda said last month it would shut its British operations for six days in April to help counter any border disruption from Brexit. It was also preparing to front-load some production at its plant to ship overseas or build up inventories.

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Nissan, Honda and a third Japanese carmaker, Toyota, together account for roughly half of the cars built in Britain.

Honda, which has been building more cars for sale outside of Europe in recent years, said earlier this month its production volumes at Swindon would be reduced to 570 cars per day and that it would make job cuts.

“This reduction in volume will not have any impact on our permanent resource levels, and is in line with our current production plans,” the company said.

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British ISIS bride gives birth to baby boy

LONDON (DPA) – The British woman at the centre of a fierce debate over whether she should be allowed to return to Britain after joining Islamic State in Iraq and Syria (ISIS)terror group has given birth to a baby boy, her family’s lawyer said on Sunday (Feb 17).

Shamima Begum, now 19, left London as a schoolgirl in 2015 to join ISIS, but last week told The Times newspaper that she wanted to return because she was pregnant and believed her child would have a better future in Britain.

Begum travelled to Syria in 2015 with two fellow students at East London’s Bethnal Green Academy, with each marrying an ISIS foreign fighter shortly after arriving.

Speaking from Al Hol camp, in north-eastern Syria, a heavily pregnant Begum told The Times that she had fled from the fighting in Baghuz, where the extremist group was battling to retain its last foothold in the region.

“I could not endure the suffering and hardship that staying on the battlefield involved,” she was quoted as saying.

On Friday, British Home Secretary Sajid Javid said the British government may try to prevent Begum from returning to Britain.

“We must remember that those who left Britain to join Daesh (Islamic State) were full of hate for our country,” Mr Javid said.

“My message is clear: If you have supported terrorist organisations abroad, I will not hesitate to prevent your return,” he added.

However, Justice Minister David Gauke said on Saturday that there could be legal problems if Begum’s wish to return was rejected. He told Sky News that people should not be made stateless.

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How a no-deal Brexit is shaping up, from banks to food supplies

BRUSSELS (BLOOMBERG) – With just six weeks to go until Brexit day, British Prime Minister Theresa May continues to wield the threat of walking away from talks as a negotiating tactic.

Companies are taking it seriously, stockpiling food, drugs and manufacturing parts. Governments are also kicking into action, but what they can – or want – to do is limited.

The most catastrophic effects such as a rupture in the multitrillion-dollar derivatives market or the grounding of planes have probably been avoided.

But bottlenecks that leave food imports rotting in ports remain a real risk, and there’s still a big question mark over what happens to flows of data that are crucial for businesses and governments.

The European Commission is taking measures to protect the bloc, while telling member states not to do anything that would make life too easy for the Brits.

Here’s a look at what a no-deal would mean for key industries:

Finance: The worst averted

The EU and the United Kingdom aren’t really cooperating on no-deal planning except in one major area – finance – where both sides would stand to lose from a big market meltdown.

Cooperation agreements will enable UK and EU regulators to supervise each others’ markets, and there’s a plan in place to avoid a cross-channel rupture in the multitrillion-dollar derivatives industry by ensuring EU banks can continue settling trades at clearinghouses in London.

Another agreement allows mutual funds and hedge funds in the EU to continue to delegate trading to staff in London.

But the financial industry is pressing for further action from policymakers so there are no hiccups in trillions of dollars of another type of derivatives contracts that aren’t settled at clearinghouses – over-the-counter uncleared swaps traded directly between buyers and sellers.

Lobbyists are also calling on the EU to allow British exchanges and trading venues to be used for equities and derivatives transactions before they are then settled at the clearinghouses.

Banks will also have to deal with the fallout of a currency shock in the event of no-deal, as analysts predict sterling could plunge as much as 20 per cent.

Data: Hoping not to get caught

Data now flows freely between the EU and the UK as they both follow the same rules. With a no-deal Brexit, while the UK has said data will still be able to flow, Europe has given no reassurance the same will apply going the other way.

To calm nerves, both the British government and the UK data regulator are advising companies to hunt down all data transfers coming into the UK from Europe, and make sure they have appropriate safeguards in place.

Essentially this means a lot of paperwork, including tasks from signing up to internal code of conducts, to adhering to standardised clauses on transferring data.

All of this is short-term advice, as the UK says it’s aiming for a so-called adequacy agreement with the EU, which would mean data flows can carry on as they did before.

The risk is slim of the EU demanding a halt to data flows to the UK – such an act would be close to declaring war – but the danger of an activist spotting an “illegal” data transfer from one multinational to another is high, and companies will be readying themselves for potential lawsuits.

Security: Spies will be all right

European intelligence-sharing networks won’t change substantially with Brexit, according to the chief of the UK’s foreign spy agency, who downplayed the effect a no-deal departure on security across the continent.

“The relationships between European countries that exist on intelligence and security are not within the competence of the European Union and it does not, even now, therefore cover these relationships,” MI6 head Alex Younger said.

However, UK Home Secretary Sajid Javid has warned that that a no-deal Brexit would mean the UK loses access to some pan-European security capabilities.

If no deal is struck, police have warned that cooperation will be slower, more bureaucratic and less effective than it is now thanks to Europol and the European Arrest Warrant.

On Sept 5, the UK issued Europol warrants for two Russian nationals over the attempted murder of a former spy and the use of a Novichok nerve agent on British soil. Under current rules, if the suspects travel within the EU, another member state would automatically arrest them.

Outside of the bloc, that reciprocal arrangement would depend on the UK’s relationship with individual nations.

Food: The fridges are full

Supermarkets and their suppliers are stockpiling food, but all frozen and chilled storage is already being used and there is limited warehousing space left.

They are also attempting to find alternative supply routes, but there are few options and not enough ferries available.

Retailers rely heavily on European supply chains, with one-third of food in the UK coming from the EU. Their main concern is disruption at the crossing between Calais and Dover.

The government has said it would wave in most EU traffic, but that won’t solve delays going the other way.

Airlines: Fairly smooth flying

Following an agreement between the UK and the EU, airlines from both sides should be able to carry on flying unhindered to each other’s territory after March 29. The accord extends to overflights and refueling stops and also extends the validity of safety certification that might otherwise be voided after the split.

British-owned carriers need to take further steps to carry on operating solely within the EU, and vice versa. In order to do that airlines must acquire overseas licenses – with EasyJet Plc setting up in Austria and Ryanair Holdings Plc, which is Irish, securing permission for domestic UK flights.

Meanwhile, the world’s biggest caterer to the aviation industry has begun to amass food and cutlery. Gate Gourmet, which serves 20 airlines at 10 UK airports, is accumulating enough supplies to see it through about 10 days of disruption – including some items that need to be kept cold.

Healthcare: Drugs and Blood

The government is making plans to accumulate drugs and blood products in the event of a no-deal departure. And it’s telling patients not to build their own private stashes at home. Pharmaceutical companies are booking space on planes to avoid delays at ports, and Novo Nordisk, which makes insulin, aims for an 18-week supply.

Manufacturing: Stockpiling parts

For British manufacturers that rely on imported parts, no-deal is a nightmare. Airbus has been laying in parts at its plants in the UK and Germany, enough to cover production for one month.

Jet-engines giant Rolls Royce Holdings has moved the approvals process for its products to a facility in Germany and is storing up components.

The car industry has also been hoarding extensively: Aston Martin has plans to ship car components via air freight to avoid using Dover, while Volkswagen-owned Bentley has been supplying parts through an alternative port for the last eight months. Companies also are prepared to idle factories.

Channel Tunnel: Open, but on EU’s terms

Rail services through the Channel Tunnel that connects Britain to mainland Europe will continue for three months after March 29. The European Commission’s unilateral proposal would apply to all traffic – passengers, cars and freight – and is contingent on the UK side maintaining existing EU safety standards and rules.

The commission said the three-month period would allow the two sides to come up with longer-term solutions.

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Europe working to keep defence ties with UK after Brexit – German minister

(Reuters) – Europe is working on continuing defence cooperation with the United Kingdom after it leaves the European Union, German Defence Minister Ursula von der Leyen told Deutsche Welle in an interview on Friday.

“We are working on a regulation – the so-called third-state regulation – that gives access to countries like our British friends, which we want to have in our European Defence Union,” the defence minister said bit.ly/2DJS0x6.

Britain is due to leave the European Union on March 29.

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Deal or delay? Wall Street divided on Brexit

LONDON (Reuters) – As the United Kingdom’s Brexit crisis deepens, two of the titans of Wall Street have starkly differing views of the ultimate outcome: Goldman Sachs sees a 50 percent probability of a ratified deal while JPMorgan sees a delay.

Unless Prime Minister Theresa May can get a Brexit deal approved by the British parliament, then she will have to decide whether to delay Brexit or thrust the world’s fifth largest economy into chaos by leaving without a deal.

Goldman Sachs said it sees a 50 percent probability of May getting a Brexit divorce deal ratified, adding that lawmakers would ultimately block a no-deal exit if needed.

Goldman said it saw the probability of a no-deal exit at 15 percent and the probability of no Brexit at around 35 percent.

“There does exist a majority in the House of Commons willing to avoid a ‘no deal’ Brexit (if called upon to do so), but there does not yet exist a majority in the House of Commons willing to support a second referendum (at least at this stage),” Goldman said in a note to clients on Friday.

“The prime minister will repeatedly try to defer the definitive parliamentary vote on her negotiated Brexit deal, and the intensification of tail risks will continue to play a role in incentivising the eventual ratification of that deal.”

May suffered a defeat in parliament on her Brexit strategy on Thursday that undermined her pledge to EU leaders to get her divorce deal approved if they grant her concessions.

She has promised that if parliament has not approved a deal by Feb. 26, she will make a statement updating lawmakers on her progress on that day and lawmakers will have an opportunity on Feb. 27 to debate and vote on the way forward.

JPMorgan said it thought May would now seek an extension to the March 29 deadline.

“I don’t think it’s inevitable, it’s certainly possible. If there is going to be an extension, it needs to be with a purpose, it needs to be with a view to securing and ratifying an agreement,” Irish Prime Minister Leo Varadkar told reporters.

“I don’t think anyone would like to see this stalemate or impasse or period of purgatory continue for months and months and months.”

BREXIT MAZE

The divergent views from two of the most powerful Wall Street banks indicates just how hard investors are finding it to read the labyrinthine plots and counterplots of Brexit, the United Kingdom’s most significant political and economic move since World War Two.

“Having chosen to afford the PM extra time this week, our expectation is that a majority of MPs (Members of Parliament) will finally be prepared to begin to take action to attempt to ensure that a “no deal” exit does not occur at that point,” JPMorgan said.

“We continue to think it likely that, rather than allowing the vote and consequent ministerial resignations to occur, PM May will attempt to forestall by stating that she will seek an extension herself.”

Most major banks got the 2016 referendum wrong.

The consensus then was that the United Kingdom would not vote to leave the EU. As results came in showing that it had, sterling had its biggest one-day fall since the era of free-floating exchange rates introduced in the early 1970s.

In private, though, many bankers are deeply worried about the possibility of a no-deal Brexit.

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“The more messy this gets the more worried I am that we are heading for no deal,” said an executive at one investment bank in London who spoke on condition of anonymity.

“We still expect a last-minute deal, but the closer we get to exit day we become less sure,” the banker said.

Berenberg, one of Europe’s oldest banks, said it saw the chances of May getting a majority for her deal at just 10 percent. It sees a 30 percent chance of a hard Brexit and a 20 percent chance of no Brexit.

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May will fall if she relies on opposition to pass Brexit deal – Baker

LONDON (Reuters) – British Prime Minister Theresa May’s government will collapse if she relies on the opposition Labour Party to pass her Brexit deal, an influential pro-Brexit lawmaker said on Friday.

Steve Baker said the Northern Irish party whose 10 members of parliament props up Britain’s government would withdraw support for the government because they are opposed to the inclusion of the so-called Irish border backstop.

Britain’s opposition Labour Party has offered to support the government’s Brexit deal if she makes five legally binding commitments – including joining a customs union.

“Were this deal to pass through parliament with this backstop on Labour votes the government would subsequently collapse because the DUP will not be able to maintain confidence and supply,” Baker told BBC radio.

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