Odds On Brexit Extension Narrow As Latest Deadline Looms
The chances of a Brexit deadline extension running into 2021 are growing as the UK and EU struggle to find consensus on a trade deal.
The UK has been negotiating with the European Union for over three years since the 2016 Brexit referendum result triggered the political process of withdrawal from the trading bloc.
Boris Johnson had pledged to “Get Brexit Done” when he was voted in as Prime Minister with an 80-seat majority in the House of Commons back in December 2019.
But with just over a month before the transition period is scheduled to end on January 1, 2021, it appears as though the two camps are still a long way off any agreement.
Issues over food standards, freedom of movement and fishing are still gripping the discussions between Brussels and London. A particular sticking point is the length of a review on a fishing deal that could kick the tricky issues of fisheries around Great Britain and Northern Ireland down the line for years.
Brexit Odds Shift
And bookmakers who are offering the latest Brexit betting markets have moved to decrease the odds on a short Brexit extension into the spring of 2021.
According to the latest odds, there is a 4/9 chance that the transition period deadline will be pushed back up to three months. That would likely mean a full withdrawal date of March 31, 2021 – two years and two days since the House of Commons voted against Theresa May’s withdrawal agreement.
A less likely prolonging of Brexit by four to six months is priced at 10/3, while an extension of seven months or greater is out at 7/2.
The odds indicate that bookmakers are covering themselves if a short extension is required, but neither they nor punters believe the process will go on into the summer.
No Deal Brexit Chances
Of course, this market relies on the UK not taking up the two other options: either signing a deal with the EU before December 31 or going all-in with a No Deal Brexit.
Johnson has insisted throughout the negotiation process that No Deal is on the table and that UK businesses should prepare for the likelihood of defaulting onto WTO terms with the EU.
The PM’s rhetoric came to a head in September when he effectively called off the talks, only to introduce them a month later.
Extending the negotiations into 2021 would mean a failure to deliver the promise Johnson made when canvassing for the election a year ago.
However, the PM may be able to convince Brexiteers that a short extension in chase of a Deal with one of the world’s largest trading blocs is better than No Deal, which would come in the middle of the UK’s second wave of Covid-19, an impending economic crisis and the election of Joe Biden in America.
Biden has already insisted that any threat to the Good Friday Agreement by the UK’s withdrawal process would greatly damage hopes of a UK-US trade deal.
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