Forecasting Brexit has gone from hard to impossible. The fluid, politically charged situation means probability scenario changes with the news cycle. Time like this we would just like some popcorn to watch the action from the sidelines. It looks like the UK is heading for another useless extension. One thing is for sure, for the UK's economic outlook, extra uncertainty will further damage economic growth and investor appetite. Tuesdays, construction PMI data which fell to 45 against 46.5 expected, highlighted the harm prolonged ambiguity is having on activity. Today, services PMI dropped to 50.6 in August, from 51.4 in July. Fall in Service PMI indicates that the critical services sector of the economy is just holding on.
Given the number of Tories rebelling today's anti no-deal Brexit legislation is likely to succeed. PM Johnson has indicated that he would not go back to Brussels to ask for another extension. Now PM Johnson indicated that he would push for a general election under the Fixed-term Parliaments Act but Leader of the Opposition, Jeremy Corbyn stated labor would not lend vital votes for a general election until another Article 50 extension had been secured. Despite the noise, the probability of a no-deal exit remains the highest outcome in our view.