Betting against Brexit: Why one strategist says the UK won’t leave the EU

Prime Minister Theresa May, accompanied by her husband Philip, making a statement in Downing Street after she traveled to Buckingham Palace for an audience with Queen Elizabeth II following the General Election results.
Jonathan Brady/PA Images | PA Images | Getty Images

She's been called a "dead woman walking." But U.K. Prime Minister Theresa May is trying to prove she's not only very much alive, but so are the negotiations to pull Britain out of the European Union, scheduled to start on June 19.

Following a disappointing election outcome, May's working to show she got the message, loud and clear. She's dropped her controversial co-chiefs of staff. She brought former leadership rival Michael Gove back into cabinet to bolster her position and help with Brexit negotiations. And she's consulting with Conservative MPs as she scrambles to unite her party heading into coalition talks with Northern Ireland's Democratic Unionist Party (DUP).

"Crucially I've brought in talent from across the whole of the Conservative Party," May explained. "This is the government that is going to be governing for everyone. We want a country that works for everyone, bringing that talent together to ensure that we can get on with the job of delivering the successful Brexit."

Now talk has turned to what kind Brexit that will be: hard, soft, or a so-called Norway-style deal that offers access to the European Economic Area to allow U.K. financial services to be "passported" into Europe.

"I don't think it necessarily means that the United Kingdom will be completely over a barrel with the European Union," said Matt Beech, Director of the Centre for British Politics at the University of Hull.

"Because Mrs. May's in this mess, I don't think it necessarily means that the Conservative Party doesn't have a strong case to put to the EU simply because I believe personally that it's in the European Union's best interest to continue tariff-free trade with the United Kingdom as it is in the United Kingdom's interest."

But will Brexit even happen? One strategist is betting against it.

"Brexit is dead. Within six months, Theresa May will be out. She's as popular as the girl that brought a ham sandwich to a bat mitzvah," said Andrew Freris, CEO of Ecognosis Advisory. "We're not going to have a soft or a hard Brexit. We won't have a Brexit at all."

Freris said that's going to be bullish for sterling and the FTSE 100 in about six months' time, and "colossally bullish" for the European Union because they'll be able to use the failure of Britain to leave the EU as a warning for other nations considering an exit. Essentially, Freris thinks the kiss of death for the Brexit process is the coalition that looks set to govern the U.K. now that Prime Minister May's lost her majority.

"From an outsider looking in, the notion that potentially the event of the century in the U.K. is going to depend on ten Northern Irish MPs is beyond ludicrousness," he said. "It is completely irresponsible and absurd, and that's why it's not going to happen."

For now, though, Prime Minister May's keeping her stiff upper lip and pushing ahead. She's already huddled with her new cabinet. She's meeting Conservative MPs today as she works to maintain party unity. And on Tuesday, she sits down with Arlene Foster, the Democratic Unionist leader.

And while those Brexit talks are scheduled to start in a week's time, a fair number of people argue the next significant stop in this drama will be at the ballot box.

"I think the electorate is kind of lost, the country is mainly split between Brexiters and Remainers," said Philippe Le Corre, visiting fellow in the Center on the United States and Europe at the Brookings Institution. "I would say 80 percent chance that there will be another election later this year or early next year."