The consequences of the 23 June 2016 referendum are becoming increasingly clear in the UK, and are painting a worrying picture of what might happen to the UK economy eventually if reason does not quickly start to prevail again in negotiations. Around 15 months after the UK voted to leave the EU, the parties have still not dealt with the preliminary matters that need to be resolved before discussions start on the trade agreement that is supposed to govern future UK/EU relations. Every day that passes without those matters being resolved increases the prospect of a hard Brexit, which likely to cause economic and financial chaos whose repercussions are difficult to predict on both sides of the Channel.

That outcome is clearly not the one that the Brexiteers sold to voters in the referendum campaign. As a result, unless the talks stir further anti-European resentment among the British people, they are likely to have growing doubts about whether the choice they made in 2016 was the right one. A new referendum could then happen, which could result in the UK deciding not to pursue the tricky matter of Brexit. We regard this scenario as fairly likely following Theresa May’s failure to win the snap election on 8 June 2017. In the meantime, and especially since we cannot count on that being the outcome of the saga, the threat posed to Europe by this looming divorce is likely to grow over the next few months.

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