Deutsche Bank sees 55% chance Brexit deal rejected

Deutsche Bank said on Thursday it sees a 55% chance that UK Prime Minister Boris Johnson’s Brexit deal will be rejected by the UK Parliament on Saturday, Reuters reported.

The bank estimated the chances of the agreement being approved at the weekend at 45%. 

Deutsche Bank said the deal may ultimately get ratified after a UK general election.

The UK announced an eleventh-hour Brexit “deal” with the EU earlier on Thursday, but markets remain nervous ahead of Saturday when Johnson faces a close vote in parliament to get it approved. 

“In our view, it seems slightly more likely than not the deal will fail to pass parliament,” said Deutsche Bank Macro Strategist Oliver Harvey.

“But the most likely outcome in these circumstances is a Conservative majority in a general election, after which Prime Minister Johnson’s deal is then ratified.”

European Union leaders unanimously supported the new Brexit deal, leaving Johnson facing a battle to secure the UK parliament’s backing for the agreement if he is to take Britain out of Europe on October 31.

European Commission President Jean-Claude Juncker said: “All in all, I am happy, relieved that we reached a deal …

“But I am sad because Brexit is happening.”

Donald Tusk, president of the European Council, said: “On a more personal note, what I feel today is sadness …

“Because in my heart, I will always be a remainer.

“And I hope that if our British friends decide to return one day, our door will always be open.”

Johnson does not have a majority in the 650-seat UK parliament, and needs at least 318 votes to get a deal ratified. 

Negotiators worked this week to agree a compromise on the question of the border between EU member Ireland and the UK province of Northern Ireland, the most difficult part of Brexit. 

The conundrum was how to prevent the frontier becoming a backdoor into the EU’s single market without erecting checkpoints that could undermine the 1998 Good Friday Agreement, which ended decades of conflict in the province. 

The agreement reached will keep Northern Ireland in the UK customs area but EU tariffs will apply on goods crossing from mainland Britain to Northern Ireland if they are headed to Ireland and into the EU’s single market.

The agreement scraps the “backstop”, a mechanism envisaged earlier that was designed to prevent a hard border being introduced on the island of Ireland, and would have bound at least parts of Britain to some EU rules.