Think tank predicts UK government collapse in 2018 before Brexit

Published:  6 Nov at 6 PM
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Tagged: UK, England
A US think tank is predicting Theresa May’s inability to deal with the split in her party as well as placating the general public and expats will result in a government collapse and new election.

Strategists and economists working for Morgan Stanley have released their considered opinions about the future of both the present government and, by definition, the Brexit negotiations. Their conclusions rest on Theresa May’s seeming inability to walk the increasingly unstable tightrope of the split in her party and the continuing chaos of the Brexit negotiations. In addition, she will become unable to placate increasing sections of the general public including UK expats living in EU member states.

Leaders of the Morgan Stanley team Melanie Baker and Jacob Nell are suggesting the PM’s miniscule Commons majority will mean the rebellion of a few hardline Brexiteers will result in the implosion of the present government followed by yet another general election. Their take on the timing of such an event rules out 2017, but the think tank’s conclusion is a total governmental collapse next year.

Reasons for the delay until next year include concessions which allow Brexit negotiations to continue, albeit falteringly, thus holding together the government as outcomes are still open and the Labour party is ahead in the polls. However, by 2018, it’s likely EU negotiators will offer one straightforward and simple choice between the UK’s participation in the customs union and single market while following EU rules, and Britain’s full sovereignty over borders, laws and courts with no access to the single market or customs union.

The think tank believes this choice has the potential to split the Conservative Party and the Cabinet, an outcome which will trigger the loss of a no-confidence vote in the British parliament, thus causing another general election. The result of the election might well bring about the total collapse of Brexit, but this would be dependent on the Labour Party’s stance on leaving the EU. One certainty is the effect of the resulting political instability on investment and consumption as well as economic growth. At this point, the Bank of England might consider, but is expected to decide against, stimulating growth by easing policy.
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