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Second Brexit Referendum Now Most Likely Option PDF
Second Brexit Referendum Now Most Likely Option PDF
United Kingdom
January 24th 2019
With the Brexit deal unlikely to be revived, the Brexit options have narrowed. In our view
the probability of a second referendum being held to break the political deadlock has risen
sharply. Despite Mrs May's reluctance to delay Brexit and her view that a second
referendum would "set a difficult precedent", holding such a vote is likely to become the
only way out of the current political deadlock. A second referendum represents a course of
action that would give popular legitimacy to the government's approach to Brexit. This
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could include adopting a version of Mrs May's deal, leaving the EU without a deal, or even
reversing Brexit. One downside from delaying Brexit to hold a referendum that includes the
possibility of a vote for "no deal" is that it extends the period of economic uncertainty
faced by businesses, weighing on activity in the near term. As a result, we are revising
down our forecast for economic growth in the UK in 2019 to 1.1%, from 1.4% previously.
We now assign a 50% probability (up from 30% previously) to a second referendum being
called to break the political deadlock and give the government popular legitimacy on how
to proceed. The result of a second referendum will be influenced by the questions that it
contains and how the vote is structured. Nevertheless, such a referendum will keep the
deal negotiated by Mrs May a live political option. It also makes "no Brexit" (for which the
UK would revoke Article 50) and even "no deal" (once the extended Article 50 window
closes) possible.
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becoming the default outcome. Nevertheless, this option could be voted for in the second
referendum. We assign only a 5% probability to a "no deal" outcome.
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