That, according to Martin Gilbert, chairman of Aberdeen Standard Investments, is due to several recent developments including the impending departure of British Prime Minister Theresa May. May announced last month she will step down as leader of the Conservative Party on Friday. Her replacement — who will become the next prime minister — will likely be someone stridently in favor of the U.K. leaving the EU, Gilbert said.
Adding a more fragmented European Parliament into the picture, it looks like the next British leader may not have much room to renegotiate a deal, said Gilbert. The chairman said there's now a 60% probably of a hard Brexit happening, compared to around 25% chance before May's resignation.
"I don't think they've any option now after the European results. Unless they can negotiate something on the Irish backstop, I think there's now a significant chance of a hard Brexit," Gilbert told CNBC's Nancy Hungerford at the Institute of International Finance's spring meeting in Japan.
The Irish backstop is an agreement to essentially ensure there will be no hard border between Northern Ireland and the Republic of Ireland after Brexit, regardless of how future trade talks between the U.K. and the EU turn out. It's a major reason why British lawmakers rejected May's deal, with pro-Brexit supporters arguing that the backstop would tie the U.K. indefinitely to many EU laws.
The EU had said several times that it will not renegotiate the Brexit deal it struck with May's team. Gilbert suggested that's even more unlikely now after main centrist parties lost seats in last month's European elections.