Markets appear prepared for rejection

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Week Ahead  

Rumors that a vote in the British Parliament on the separation agreement with the EU, which was then denied by the British government, could be postponed show how bad the outlook for approval is. Even if the political path there is not predictable, there are three options at the end of the road: the negotiated package could finally be accepted, the people would be questioned again (referendum or new elections) or hard Brexit. We tend towards the second scenario, since it is hard to imagine that the negotiated package would find a majority. This would require many parliamentarians to change their minds or necessitate renegotiation with Brussels. The hard Brexit scenario would have serious immediate economic consequences for the UK, for which no one would want to take responsibility.