Goldman Sachs hikes no-deal Brexit probability ahead of crucial day in Westminster
Goldman Sachs has raised its expectations of Britain leaving the European Union without an agreement, as today’s political tussling in Westminster fuels further speculation in the City of a no-deal Brexit.
The global bank has said the prolonged suspension of parliament has led it to hike its forecasts of a no-deal Brexit from 20 per cent to 25 per cent.
Read more: The Brexit battle is heating up
Goldman’s expectations of no Brexit at all were also increased from 30 per cent to 35 per cent, while it put a 45 per cent probability on a close variant of the existing Brexit deal that was rejected three times passing in the House of Commons.
Politicians in Westminster face a showdown today with MPs who will attempt to block a no-deal Brexit.
Government sources have warned that Prime Minister Boris Johnson will push for a general election on 14 October if he loses today’s vote.
Johnson, who has vowed to take Britain out of the EU with or without a deal by the end of October, said yesterday evening: “I don’t want an election; you don’t want an election.”
But he vowed he would never personally seek a Brexit extension beyond 31 October.
Sterling has dropped below the $1.20 milestone this morning for the first time in two years, with the pound (GBP) falling as much as 0.83 per cent in early London trading to trade at $1.1961 against the dollar (USD).
Read more: The threat of no-deal is key to Johnson’s strategy
Late last month Citigroup analysts warned that Britain’s banks could face a 25 per cent dent to their earnings if Britain and the EU do not reach a deal.
In a research note the group warned that a potential economic slowdown from leaving the EU without a deal could hit earnings per share by 15 to 25 per cent.