A pivotal moment

There comes a point in any deal, when the positioning and brinkmanship ends and tough decisions need to be made. For Brexit, that might well be today. At the point of writing this on Wednesday morning, Theresa May faces the unenviable task of presenting to her cabinet what appears to be agreed terms for a withdrawal agreement. If the rumours are to be believed this takes the form of a BINO (Brexit in Name Only); one which from an economic perspective appears relatively benign (sterling has reacted with cautious optimism), but from a political perspective is likely to be very challenging. The main challenge from Brexiteers is the continuing regulatory ties to the EU without the corresponding input; ‘a vassal state’ according to Jacob Rees-Mogg. Meanwhile, the DUP’s concerns are that the deal fundamentally damages the union. Although all parties await to see the draft text, Arlene Foster’s party prefers the risk of a new General Election to ‘the break up of the UK’. This will please Jeremy Corbyn who, to Tony Blair’s criticism, has not yet called for an election but has called for reassurances of a ‘meaningful’ parliamentary vote on the terms of the exit. Increasingly, May looks unlikely to be able to deliver this deal, facing opposition from all sides of the Commons, including her own. Although a second referendum remains unlikely, odds have been tightening to less than 2/1. May’s own prospects are also shortening, with her role at the top being measured by most in months. To underscore the futility of her position, the odds of the UK applying to rejoin the EU prior to 2027 have now come down to less than evens.