SocGen Has 5 Brexit Scenarios

With Brexit talks formally starting on Monday, the coming weeks and months are likely to offer the world a glimpse of what Britain’s EU exit will finally look like.

Before the general election, it seemed fairly obvious that Prime Minister Theresa May was only considering one type of Brexit — a hard exit including tightly controlled immigration but an exit from the European Single Market.

However, after May’s failure to win a majority in the House of Commons — which is set to lead to a minority Conservative government propped up by the DUP — it is possible that there may be a moderating of stance on leaving the EU, with senior figures in the government, including Chancellor of the Exchequer Philip Hammond pushing for a less aggressive approach.

According to new research from French lender Societe Generale, hard Brexit remains by far the most likely outcome — with a 70% probability — but there are four other possible scenarios that could play out in the next 18 months of negotiations.

“It is tempting to talk up the chances of a soft Brexit following the humbling of May in the election, but to us a hard Brexit is still much the most likely outcome,” SocGen’s Brian Hilliard wrote in a note to clients on Tuesday.

The five possible Brexit scenarios, including the basic hard Brexit, are:

1. Hard Brexit
2. Soft Brexit
3. Cliff edge Brexit
4. No Brexit
5. “Back to the drawing board”

For the full scenarios visit Business Insider

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza