If, by the time you read this, 48 letters expressing No Confidence in Theresa May as Conservative Party leader have been received by Graham Brady, then:

  1. The vote should take place within 24 hours
  2. If TM gains votes from 158 of her MPs (half the parliamentary party) then she stays as leader and cannot be challenged again for 12 months
  3. Expectations are already being trailed that a loss of over 100 would be enough to make her go.
    – We would disagree. Any woman witnessing Thatcher’s enforced departure would not leave the top job unless the numbers make it so.
  4. Even the most extreme Brexiteers and Remainers fear they don’t have enough momentum to carry half of the party with them. That’s why they couldn’t move until TM was knocked out onto the canvas. They had to be certain she was gone.
  5. But even now, Conservative MPs face a dilemma. 
    – Once TM goes, one of the final candidates won’t be Brexity enough for Brexiteers or Remainy enough for Remainers. That means both factions have a 50% chance of losing out.
  6. The odds however favour the Brexiteers. The final decision on leader comes down to the Conservative Party membership, and they’re certainly on the harder Brexit side of things.
  7. In trying to move the odds in their favour, it’s no surprise that neither Brexiteer nor Remainer can yet agree on who their own candidate should be.
    – Leading ERG member Steve Baker has told Brexiteers who quit the Cabinet to “work out between them which one of them is going to be our candidate to unite the country” – i.e. Boris Johnson, Dominic Raab, Esther McVey and David Davis

So the calculation runs thus:

  • Are you confident that if TM goes, you’ll get someone you prefer in her place?
  • For Brexiteers, the answer is probably Yes. For Remainers, it’s less clear cut.
  • Or are you just so sick of the shambles, you just want to gamble

So how many Tory MPs are Remainers?

Here’s our MP by MP analysis which shows the shape of the Conservative Party on our scale of -15 for most Remain MP to +15 to most Leave MP:

One third of the Party ranks at a zero or below. This is the Remainer rump.

And where can Theresa May find her magical 158 MPs? Everyone ranking at +2 or below would get her there.

Is there a compromise candidate who could tempt some of those away from her?  Well here’s a map of Cabinet MPs from just before Raab resigned:

Can Javid, at +5, become a kind of compromise candidate? Likes Leave enough to please the membership but Remain enough to calm his Remainer colleagues?

He won’t get the chance if 158 MPs decide they prefer the devil they know. So this contest will only be called when it has the momentum the Prime Minister’s detractors desire. It might be tomorrow. If it’s not, it is still coming. The end game of power, and the chance to shape the Brexit of your dreams, are within your grasp. It’s just a question of timing.

And while it lurks, the Labour Party can continue to hold fire on their own No Confidence vote, despite Vince Cable and Nicola Sturgeon publicly lambasting Jeremy Corbyn for not doing so already. Why pull the trigger if the Conservative Party can set off some friendly fire shots that weaken their already divided party?

Even if TM wins, she won’t be out of the woods. The pressure cooker will still be steaming. Every attempt to try to preserve the status quo is tinder for the fire for those who desire a very different Brexit outcome.

The upshot for financial markets is that we are entering a much more significant crisis period. The chances of either No Deal or No Brexit are rising. All these months of inaction were not a reason to be calm about the future. They were merely time for some shadow boxing and weapons stockpiling before the bombs start to go off. We continue to expect a sharp dislocation in GBP assets in the next couple of weeks as this becomes apparent.

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