Market Insights

Sir John Curtice Speaks

+++ TOP LINE: Government could fall in next few weeks as MPs panic and no compromise on Brexit is acceptable either to Parliament or the population +++

Full recording:

In our discussion with John Curtice he presented the following facts:

  1. There are now four spaces for UK Political parties to occupy
    • Classic Economic Left vs Right
    • New Social Liberal vs Conservative
  2. Brexit cuts across the latter
    • Remainers = Social Liberals
    • Leavers = Social Conservatives
  3. The new Independent Group occupies the former ground. “Calling it a centrist party isn’t a helpful term“. “On Brexit, regard them as extremists“. It will cost votes for both main parties. According to British Social Attitudes survey 2015, social liberals account for:
    • 37% of Labour voters
    • 33% of Conservative voters
  4. The 2017 Election was about Brexit and the widening of this cleavage:
  5. The Brexit division is deep and unresolved.
    • 75% of Leave voters want a Hard Brexit as their first preference
    • Half of Remain voters want to Remain completely
    • Norway & Customs Union only attractive to 32% of voters
  6. There are no acceptable compromises, leaving Theresa May in the unenviable and impossible position of pleasing almost none of the people all of the time
  7. Polling on a second vote suggests the wording is key: if it’s a People’s Vote it yields more support than if it’s a 2nd Ref. “You cannot unambiguously say there is clear support for a Second Referendum“.
  8. Opinion has shifted against Brexit, but the “Remain lead rests heavily on whether those who did not vote would turn up to vote this time“. “Loyalty of Leave voters has declined to a degree“.

He also notes:

TIG is similar to SDP in that it arose from division over Europe, and it will likely have to form an alliance with the Lib Dems to gain enough ground to matter. If they can get >35 MPs then they will become the 3rd largest party which will award them privileges over parliamentary time.

An early General Election would be “disastrous” for TIG but they might do well in the European Parliamentary election as the anti-Farage Brexit Party, should the UK have a vote in those elections.

Few expect Brexit to be wrapped up by 29th March. All the legislation will be held up by the House of Lords anyway.

He concludes:

  • At what point do MPs start to panic?
  • Real risk that if Cooper/Boles amendment fails and TM can’t get her Deal through then the government will fall
  • Brexit has disrupted the traditional pattern of support for the main parties and it’s difficult for them to keep together
  • Brexit attitudes are so deeply polarised that it will be difficult to find an acceptable compromise
  • A second referendum is not a panacea

The full recording is available here & should you want the presentation please email


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.

Which Labour MPs will vote Conservative?

Attention has moved from the 40-80 Conservative MPs that Steve Baker claims can kill the government, to the 30-40 Labour MPs that Downing Street hope can let its deal survive. The Times and the FT both run stories today on these so-called Labour rebels.

The headline is misleading. The quotes from Labour MPs show just how uncertain they are over how they will vote. They fear deselection. They hope Corbyn will change. They will vote down the government only to vote with them later. Listen below for our 3 minute wrap with more details:


To determine how Labour MPs will shake down, we refer you back to our Labour MP breakdown:

And our table of support for each Brexit outcome:

If you would like more detail on how we calculated these figures, or to run other configurations, please let us know.

The Iron May-dy

That was intense!

In case you missed it, Theresa May just spoke on how she believed Brexit negotiations went with the EU 27…

(If looks could kill…)

What does it mean? What can we expect? Does anything change?

We know it is Friday so do not expect you to read anything now, so BlondeMoney has put together a quick podcast discussion between the team. It is under 5 minutes so you can even drink a glass of red while you listen!


As a weekend treat, here is EU’s Donald Tusk enjoying the EU summit…