The Economist Intelligence Unit (EIU) does not expect the UK to leave the EU on March 29th, it is announcing in a new forecast.
The new forecast projects that Theresa May’s government will lose Tuesday’s ‘meaningful vote’ on the withdrawal agreement and political declaration negotiated in November and will be forced to request an extension of the Article 50 window for negotiating the UK’s withdrawal, which the EIU believes the EU will agree to.
The new forecast also outlines that the EIU believes that a ‘no deal’ Brexit is now the least likely scenario, while the two most likely outcomes are an eventual approval of the Brexit deal, or a second referendum.
If the government loses Tuesday’s vote it will have three sitting days to present an alternative or revised Brexit plan to MPs. However, it is not clear at this stage what concessions Mrs May could extract from the EU, apart from vague political declarations.
Any delay in Britain’s withdrawal will mean that the EU will need to make necessary provisions for the European Parliament elections taking place in May. It is not clear at this stage what will happen to the former UK-held seats in the European Parliament that have been reallocated to other EU member states, as The EIU noted in an earlier white paper, published in December.
Danielle Haralambous, UK analyst at The EIU, says: “Time is simply running out, and we’re at a stage where Brexit can probably only happen in late March now in the unlikely event that parliament approves Mrs May’s deal on January 15th, or if parliament supports leaving without a deal. For all other options, the government will need to buy more time, and we think the EU will be willing to provide it to avoid a cliff-edge situation.
“Mrs May and her government are not prepared to run down the Article 50 clock and leave the EU without a withdrawal agreement and transition arrangements in place, although this remains a possible Brexit outcome later in 2019″.
“However, delaying Brexit does not remove the downside risks to the process. With the time it has bought, the government can pursue a new plan, but it will still be working towards a deadline to resolve the same deep political divisions over what Brexit should look like. In our view, the longer this political deadlock lasts, the higher the probability of a second referendum to break it and give the UK government popular legitimacy to pursue one of the potential options.”