Investors should start preparing for a scenario in which the U.K. does not reach an agreement with the European Union over Brexit, a political analyst told CNBC Tuesday.
The U.K. voted in June 2016 to leave the EU, but the process to leave the bloc has proven long and rich in technical details. No matter what, the departure date has been scheduled for March 29 next year — meaning that negotiators have about six months to conclude negotiations on aspects such as the movement of people and goods across the border between Northern Ireland and the Republic of Ireland.
Technical details aside, the politics of Brexit are also not helping. David Davis, the chief Brexit negotiator for the U.K., and Boris Johnson, the foreign minister and perhaps the most vocal Brexit supporter, both resigned Monday over differences with the prime minister. A lack of support from within her own political party could spark a leadership challenge, or even lead to another general election.
Following both resignations, Theresa May told the U.K. Parliament that preparations for a “no deal” scenario would be stepped up and that lawmakers should prepare for a number of outcomes.
“Markets have been remarkably sanguine about the possibility of a no Brexit scenario and I think they do actually have to start taking it a little bit more seriously now,” Richard Mylles, political analyst at Absolute Strategy, told CNBC’s “Squawk Box Europe” Tuesday.