The odds of a potential no deal Brexit outcome occurring have been slowly dropping in the last few days as Theresa May continues to struggle to come to an agreement with the European Union (EU). On the 4th February 2019 Paddy Power were offering odds of 11/4 for Britain to leave the EU without a withdrawal agreement, but just three days later those odds have been cut down to 9/4 which means it is becoming more likely to happen.
They are also offering odds on the opposite happening, and the United Kingdom to either leave the EU with an agreement on March 29th or have Article 50 either extended or revoked. This is priced at 3/10 and thus still a more likely outcome, but the market has begun moving as we edge closer to the withdrawal date.
The fact that these odds are starting to change is a result of the country and the EU failing thus far to agree terms for Brexit and due to time running out to get the deal done. Many people in the United Kingdom are trying to force a second referendum to try and avoid a potential no deal Brexit, but the chances of a 'People's Vote' happening look slim with bookmakers offering odds of 7/2.
The United Kingdom is due to leave the European Union on 29th March 2019.
What does no deal Brexit mean?
Plenty of people still hear the politicians talk about a no deal Brexit and have little to no idea what it actually means. A no deal Brexit basically means that the United Kingdom would leave the EU on the 29th March 2019 with no agreements about what the relationship between the two would be in the future.
It would also lead to a number of things happening. Boarder checks could be re-introduced, transport and trade could be affected between the UK and the EU whilst the charge for data roaming on mobile phones in EU countries could significantly increase. It also means that businesses would have to respond straight away to change caused as a result of leaving.
Dr Simon Usherwood, a reader in politics at the University of Surrey, recently said: "In reality, a no deal scenario would mean there would be no transition period for consumers, businesses and public bodies and they would have to respond immediately to the changes. This scenario would allow Britain to try and broker trade deals with other countries, but they take years to complete."
Parliament does not want this outcome to happen, but it is becoming increasingly more possible with the politicians still struggling to come to an agreement on what should happen next. The Brexit deal Theresa May had previously put together has already been rejected in the House of Commons, and she has now gone back out to Brussels to begin another round of crisis talks with Jean-Claude Juncker and Donald Tusk.
Theresa May has met with European Union chief Jean-Claude Juncker to try and push through a Brexit deal.
How likely is no deal Brexit?
MP's have this week voted to block a no deal Brexit, passing an amendment which whilst not legally binding does put pressure on the Prime Minister to secure a deal in time which the majority of Parliament accepts.
Theresa May herself has always maintained that she intends to get a deal before March 29th, so whilst possible the no deal scenario still remains quite unlikely. Indeed after failing to push her initial withdrawal agreement through she issued a rallying cry, saying: “We can choose to leave with no deal, we can risk no Brexit at all, or we can choose to unite and support the best deal that can be negotiated.”
However, time to come to an agreement is running out and she has also said that she could not rule out leaving the EU without a deal, something which has been widely criticised by the Leader of the Opposition Jeremy Corbyn.
She does have a couple of other options, including asked for an extension of Article 50 which is possible or even reversing Brexit totally or issuing a second referendum, which is unlikely to happen as it isn't supported by her own party or Labour.
Whether this can be sorted out in time remains to be seen, but the bookmakers odds certainly suggest that a no deal Brexit is becoming more and more likely with each passing day.