Anti-Brexit demonstrators outside the British Parliament in London.
Yui Mok | PA Images | Getty Images
The U.K. will eventually leave the European Union without a deal, according to a strategist at First Abu Dhabi Bank, who predicted that the divorce will be triggered by the bloc instead of Britain’s prime minister.
“From the start I’ve said — and I’ve been very consistent — that a no-deal Brexit is the only way this is going to conclude,” said Simon Ballard, executive director and macro strategist at the bank.
“People have dismissed that, but little by little, I think the market is starting to shift onto my side of the camp,” he told CNBC’s “Capital Connection” on Wednesday.
The U.K. was initially supposed to exit the EU on March 29. But that departure date has been postponed multiple times, and Britain now has until Oct. 31 to leave.
Disagreements between British lawmakers over how the U.K. should exit the bloc led to Theresa May stepping down as prime minister in June — and to the appointment of Boris Johnson as the country’s leader.
In a letter to European Council President Donald Tusk late Monday, Johnson said U.K. lawmakers could still approve a Brexit deal if the EU agrees to remove the so-called Irish backstop. The issue is seen as the most controversial part of the existing Withdrawal Agreement, and involves maintaining a seamless border separating Northern Ireland and the Republic of Ireland.
But Tusk, responding on Twitter, reiterated the EU’s position that the backstop is an insurance policy to avoid a hard border “unless and until an alternative is found.” He also blasted critics of the plan, and said they had not proposed “realistic” alternative solutions.
The EU’s refusal to renegotiate the Withdrawal Agreement will lead to the predicted no-deal Brexit situation, according to Ballard.
“It’s the EU that will trigger the hard Brexit, rather than Johnson, because they will say: ‘No, there’s no further negotiation to be done. You’re starting to drag or further drag the European economy down, off you go, leave,'” he explained.
“That I think is going to be the critical thing that the market probably isn’t quite aware of at the moment: It’s going to an EU-led hard Brexit, more perhaps than Boris Johnson-led.”