March 14, 2019 / 4:28 PM / a year ago

Risk of no-deal Brexit recedes further, some banks say

(Reuters) - The risk that Britain will leave the European Union without an agreement on March 29 has receded further this week, some banks and asset managers say, citing the UK parliament’s resounding vote to rule out a no-deal Brexit.

At the end of January, banks informally canvassed by Reuters for their forecasts saw the “no-deal exit” probability as low but rising. Some of those banks have since revised down that risk.

Prime Minister Theresa May suffered another crushing defeat in parliament for her EU divorce deal this week. Since then, lawmakers have passed a non-binding motion ruling out a no-deal exit, and will now vote to seek to delay Britain’s departure beyond the March 29 deadline.

That expectation has helped sterling strengthen to nine-month highs against the dollar and 22-month peaks against the euro.

For an interactive version of the chart below, click here

Below are the views from a selection of investment banks and asset managers:


Has left the probability of a no-deal Brexit at 10 percent. It sees a 10 percent chance of an early election, down from 20 percent earlier.


Has cut the probability of no-deal Brexit to 5 percent and sees a 35 percent probability that Britain will not leave. Raised the probability of May’s Brexit deal eventually being agreed to 60 percent.


Sees the chance of no-deal Brexit at 20 percent. It assigns a 15 percent probability to Brexit being revoked and a 65 percent probability for a deal being passed.


Maintains its view of a 20 percent chance of no-deal Brexit.


Has cut risk of no-deal exit to 15 percent. It also raised the probability of the UK staying in the EU to 25 percent.


The probability of no-deal exit is unchanged at 20 percent.


Still sees a 10 percent chance of a no-deal Brexit but reckons the probability of another referendum has increased to 15 percent.


Has cut the chance of no-deal Brexit to 10 percent, compared to 20 percent last month and 25-30 percent before that. It puts chance of a second referendum at 35 percent.


An outlier in that it sees 53 percent odds of no-deal exit. The probability of an extension that leads to new election or another referendum is put at 12 percent.


Europe’s largest asset manager at the end of February saw a 20 percent probability of no-deal Brexit, and a 40 percent chance of a “prolonged extension” to the March 29 deadline. It did not provide updated forecasts.

Reporting by London markets team; Graphic by Ritvik Carvalho; Compiled by Sujata Rao; Editing by Janet Lawrence

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