JP Morgan raises probability of no-Brexit to 40 per cent as chance of no deal shrinks to 10 per cent

There is now a 40 per cent chance of the UK staying in the European Union, according to a research note published by a JP Morgan economist this morning.

Citing the European Court of Justice’s top legal advisor, who said yesterday that Britain could unilaterally perform a U-turn on Article 50 if it wanted, JP Morgan economist Malcolm Barr said the UK could still take the time to hold a second referendum, despite the exit date at the end of March looming.

“The UK now appears to have the option of revoking unilaterally and taking a period of time of its own choosing to decide what happens next. That time could be used to hold a second referendum on terms entirely decided by the UK,” he said.

He doubled his estimation of how likely Brexit was to be cancelled from 20 per cent to 40 percent, and the likelihood of a no-deal scenario – but still a Brexit – shrank from 20 per cent to 10 per cent.

Meanwhile, he said an orderly Brexit, with a deal in place and a transition period, was now only 50 per cent likely to happen down from a previous estimation of 60 per cent.

This morning, leader of the House of Commons Andrea Leadsom has said a no-deal Brexit would be the “default” outcome if parliament rejects Theresa May’s deal next week.

“Unless government were to do something completely different to change tack, or indeed to pass this deal, then we will be leaving the EU on 29 March next year without a deal, so it defaults to no deal,” she told the BBC’s Today programme this morning.

MPs across parties have vowed to vote the Prime Minister’s deal down, including the Democratic Unionist Party which props up the minority Conservative government.

Labour has also said it will vote against the deal. with shadow Brexit secretary Keir Starmer saying that rejecting it could eventually lead to a second referendum, a so-called People's Vote.