Britain, Brexit And Boris’s Big Majority

6am update: A large Conservative majority should lead to a smoother Brexit outcome. It will give Boris Johnson more breathing room to extend the transition period, and if that happens the pound could push higher.

Boris Johnson voting earlier with his dog, Dilyn

Polls point to a big Conservative win

The opinion polls always suggested Boris Johnson and his Conservative Party would win the UK general election. But few predicted the scale of his win and just how badly the opposition Labour party would perform. Johnson, who campaigned with the slogan 'Get Brexit Done', is set to have a majority of nearly 80 in the House of Commons. 

For Brexit, this all means that Johnson’s deal will be ratified, most likely allowing the UK to leave the EU at the end of January. But more importantly, it could give the prime minister the political breathing room to ask for an extension to the transition period.

This is the standstill phase where the UK’s trading relationship remains unchanged, where the government hopes to negotiate the terms of the future deal. But spanning just 11-months, this is unlikely to be long enough. An extension is an option, but the EU has signaled the UK will need to sign-up to budget payments beyond 2020 – and importantly that this needs to be agreed by the end of June.

For Brexit, this all means that Johnson's deal will be ratified

This would undoubtedly infuriate hardline pro-Brexit Conservative MPs, and until now the government has ruled out an extended transition. But with a sizable majority, this could change – an extension is probably more likely than not.

Don’t forget that with a strong majority, the government may not face the electorate for another five years. An abrupt end to the transition period would be economically damaging, could limit UK negotiating power in future trade talks, and would also draw time/money away from other domestic priorities.

That said, if the government decides that there is merit in ending the transition period in 2020, there is really very little Parliament can do about it. MPs are unlikely to be able to seize control, as they did in March and September. Don’t forget a number of the moderate Conservative MPs that backed efforts to force an Article 50 extension in April and October stood down at this election.

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