Developments and scenarios ahead

The Brexit-related newsflow since the UK/EU agreement on 25 November 2018 has been quite intense. In our view, it has slightly increased the probability that the UK remains in the EU beyond March 2019, thus prolonging the uncertainty over how (and even whether) Brexit will happen. Nonetheless, our most likely scenario remains that the Brexit deadline arrives with a ratified deal (60% probability). Note that this probability covers deals other than the recent UK/EU agreement (as long as they lead to a transition period during which the UK will still be part of the European Single Market) and potentially very rocky paths to deal ratification, which would only come after major episodes of uncertainty and stress.