Societe Generale says now sees an 80% probability of a no deal between UK and EU

Puzzle with printed EU and UK flags
FILE PHOTO: Puzzle with printed EU and UK flags is seen in this illustration taken November 13, 2019. REUTERS/Dado Ruvic/Illustration

September 17, 2020

LONDON (Reuters) – Societe Generale analysts said on Thursday they now see an 80% chance that Britain and the European Union will fail to strike a trade deal before the end of the year.

British Prime Minister Boris Johnson has unveiled legislation that would break parts of the Brexit divorce treaty relating to Northern Ireland. The EU says any breach of the Brexit treaty could sink trade talks and thus complicate the border between the United Kingdom’s Northern Ireland and EU-member Ireland.

SocGen analysts said that whether or not the planned legislation, the Internal Market Bill, is passed in a form that maintains this feature, the level of trust between Britain and the EU had been “gravely damaged”.

“With PM Johnson likely to continue his high-stakes negotiating strategy, we no longer think a deal can be struck before year-end. We now see an 80% probability of a No Deal,” they said in a note.

“The UK economy is likely to be dealt another (avoidable) blow that it could well do without.”

(Reporting by Dhara Ranasinghe; Editing by Saikat Chatterjee)