The UK is scheduled to leave the EU on March 29. Although this is less than a month away, a range of possible outcomes remain possible—although clarity has emerged in certain areas since last week.
In the second of a weekly series of updates, Quentin Fitzsimmons, fixed income portfolio manager and T. Rowe Price’s resident Brexit specialist, provides an overview of the current state of play.
What Are the Current Scenarios?
The four primary scenarios are:
- Parliament agrees a modified version of the deal that the UK government has agreed with the EU and the UK leaves the bloc on March 29.
- The UK government fails to get a deal approved by Parliament and the UK exits the EU on March 29 without arrangements in place and with no transition period to enable business and people to prepare. UK trade with the EU would immediately be governed by World Trade Organization rules.
- The EU agrees to extend Article 50, the legislation that sets March 29 as the legally binding exit date from the EU, to give the UK government more time to get a deal approved by Parliament. This could potentially involve the UK electorate voting on the deal in a second referendum.
- Prime Minister Theresa May decides to call a snap election in a bid to increase the ruling Conservative Party’s majority and make it easier to push a deal through. An extension to Article 50 would be necessary in the event of a snap election being called.
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