Brexit could result in the biggest economic and political shift in recent British history. Find out more about Theresa May’s deal, the opposition to it, and how you can take a position with IG.

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Brexit: what are the options?

Theresa May's deal

The prime minister’s deal was opposed by many MPs from its inception, which prompted her to cancel a vote in the House of Commons scheduled for Tuesday 11 December 2018. She did this in the face of overwhelming opposition to the Irish backstop, and questions over whether it would tie the whole of the UK to a customs union with the EU indefinitely.

The prime minister is aiming to renegotiate contingencies for the Irish backstop portion of her plan. Any new arrangements or promises will likely be outlined in a separate document because the EU does not want to reopen the treaty agreement, which leaders of the 27 EU countries have already agreed to.

Second referendum

The option of a second referendum on EU membership has been gaining popularity since the initial result was revealed – in part due to claims that the leave campaign misled voters. The People’s Vote campaign is also campaigning for a national vote on the final agreement with the EU, something which the prime minister has ruled out.

There are several options for the ballot paper, including an ultimatum between accepting the prime minister’s deal or remaining in the EU. Another option is the one proposed by Jo Johnson and Justine Greening – a three-way vote between May’s deal, no deal, and remaining in the EU.

No-deal departure

The final and arguably most disagreeable scenario for both the UK and the EU would be no-deal – a ‘hard Brexit’. This would create significant uncertainty and could result in a drop in both the pound and the euro. The negotiation period that has been ongoing for the last two years is a representation of both sides’ attempts to avoid a no-deal scenario.

A no-deal Brexit would mean that the UK would leave the EU with no arrangements for trade, customs, travel or citizens’ rights in place. It is likely that the British economy would suffer, while the rights of EU workers in the UK and of UK workers in the EU would be uncertain.


Some MPs are calling for a bigger renegotiation – one that provides legal guarantees on the Irish border question. This would require the treaty to be reopened, then approved by the British cabinet, a summit of European leaders, the House of Commons and the European Parliament. This process has already proven to be a thorn in the prime minister’s side, one which resulted in the resignation of several of her ministers during cabinet approval of the current deal.

However, it is unknown whether a renegotiation will be possible. EU Commission President Jean-Claude Juncker has already stated that this deal is the best possible scenario for both sides and that there would be no other arrangement.

General election

The most likely path to a general election would see the opposition in the House of Commons trigger a vote of no confidence in the government. This motion would have to be passed by the House of Commons and, within 14 days, there would have to be no consensus on an alternative to the current government.

In such an instance, parliament would be dissolved and an early general election would be called to form a new government. Whether this would be in the country’s best interest is up for debate, with some saying that Theresa May should go, but others saying that a general election this close to the Brexit deadline would only increase uncertainty.

Revoking article 50

The European Court of Justice (ECJ) has ruled that the UK could stop Brexit, and remain in the EU, by revoking article 50. The UK can do this without the consent of other EU nations, meaning that the decision to do so remains entirely at the UK’s discretion.

For now, the prime minister has ruled this scenario out, stating that it would be going against the will of the people who voted to leave in the 2016 referendum. However, calls for this option could grow if the House cannot reach an agreement on the terms of Britain’s withdrawal.

Markets to watch during Brexit

Markets Bid Offer Updated Change
FTSE 100
Germany 30
HSBC Holdings PLC - ADR
Goldman Sachs Group Inc (All Sessions)
UBS Group AG (US)
Spot Gold

Prices above are subject to our website terms and conditions. Prices are indicative only. All share prices are delayed by at least 20 mins.


As ever in times of uncertainty, investors look to gold.

After experiencing a spike following the initial referendum in June 2016, gold’s price has largely settled over the last few years.

That is not to say that it couldn’t spike again, especially given the uncertainty surrounding the government’s plan and delayed vote on the final deal.


Sterling fell against the euro after the referendum result was announced. Since then, the EUR/GBP pair has maintained a steady rate of between lows of 0.87 and highs of 0.90 from December 2017 to the beginning of December 2018.

However, traders should keep an eye on the EUR/GBP pair in the months ahead, bearing in mind that the pound is likely to slump should the deal be voted down, but could strengthen if it is approved by the House of Commons.


The effect on shares since the Brexit referendum has been mixed. Some companies have benefitted from a weaker pound and improved economic outlook, and others have struggled. For the most part, the FTSE 100 has grown since June 2016, but the effects of Brexit as far as individual securities are concerned have varied. When the deal finally gets voted on, a failure by parliament to ratify it could have a catastrophic effect on companies that export their goods to the EU.


The FTSE 100 and FTSE 250 both rose over the course of 2017, thanks to weak sterling performance and an improving UK economy. However, in 2018 both have been volatile as a result of sell-offs on global equity markets, and the increasing uncertainty surrounding Brexit negotiations and the proposed deal. The trading relationship with Europe is critical to many firms’ future earnings, so indices are very likely to be affected by the final deal, whatever the result of an eventual Commons vote is.

Theresa May's Brexit deal at a glance

Theresa May’s agreement contains plans for the Irish border and an Irish backstop arrangement in the event that the two sides are unable to reach a trade deal during the transition period. It also outlines terms for a transition period, a financial settlement between the UK and the EU, and details about the rights of UK citizens in the EU and European nationals living in the UK.

It has been suggested that under the current deal proposed by the prime minister, British GDP may fall by as much as 3% per head. According to the National Institute of Economic and Social Research, this would be worth around £1000 per annum on average for each person in the UK.

The Irish border

The agreement makes contingencies for a soft border between Northern Ireland and the Republic of Ireland, should the UK leave the EU after the transition period without a deal in place. It would see the UK as a whole remain part of a EU-UK ‘customs territory’ until a new trade deal can be agreed.

This is the area of most contention in the prime minister’s deal, with Brexiteers claiming that this ‘Irish backstop’ arrangement would lead to the UK being tied to a customs union with the EU indefinitely.

The financial settlement

Britain will honour all of the financial commitments already in place with Brussels. This settlement, also referred to as the ‘divorce bill’, means the UK will contribute to the EU budget for 2019 and 2020.

The total cost to the UK for covering these expenses is thought to be somewhere in the region of £35-39 billion, though some estimates have suggested the final figure could be higher.


The deal allows a transition period until December 2020 for Britain leaving the EU. During this period, Britain would still be susceptible to all EU laws and legislation but would have no say over the forming of that legislation.

In total, there will be a 21-month transition period after the UK departs the EU in March 2019, in the hope that this will give the government and businesses the time to prepare for the long-term change.

Citizens’ rights

The prime minister’s deal maintains the EU residence rights of more than three million EU citizens living in the UK. It also ensures the social security rights of more than one million British expats living in European countries.

This was a key sticking point in negotiations, as restricted movement for European nationals into the UK would likely also mean restricted movement for UK nationals in the EU member states.

When will Brexit happen?

Should the deal be ratified by both the House of Commons and the European Parliament, the UK will leave the EU on 29 March 2019. However, with the delay in the Commons vote, it is now uncertain whether the date of departure will be pushed back.

This date reflects a deadline for the negotiation phase to be complete, and for the transition phase to begin. Under the current plan, as of December 2020, the transition period will be over, and the Brexit process will have been completed.

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What's happened in the Brexit timeline so far?

The result

The referendum held in 2016 saw over 30 million people turn up to vote. The split was 51.9% in favour to leave, 48.1% in favour of remain.

There was a significant regional variation in the vote: London, Scotland and Northern Ireland all backed remain, while England and Wales opted to leave, with 53.4% and 52.5% of the vote respectively. All in all, the vote revealed a deeply divided Britain: a fact which defined the following months of negotiations, challenges and reprisals.

The result took the government by surprise. David Cameron resigned from number 10, and was replaced by Theresa May following a leadership contest within the Conservative Party. She confirmed that the UK would leave the EU with her famous ‘Brexit means Brexit’ soundbite; despite being in favour of remain before the result was announced.

Triggering article 50

Article 50 was triggered on 29 March 2017, starting the official two-year countdown to Brexit. What followed was a period of planning by EU and UK negotiators, lasting until June 2017 when negotiations began. In the interim, Theresa May called a snap election, hoping to boost the Tory’s parliamentary majority and strengthen the government’s bargaining power with EU leaders.

The plan backfired spectacularly, as the Conservatives lost their majority and were forced to form a coalition with the Democratic Unionist Party (DUP). Some argue this has weakened the government’s position considerably, as ratification of the final deal will require the backing of the DUP in parliament.

Brexit negotiations

Negotiations officially began on 19 June 2017, with the UK accepting a phased negotiation timeline suggested by Michel Barnier, the EU’s chief negotiator. Phase one concluded in December 2017, with agreements in place regarding a financial settlement of between £35-39 billion, a soft Irish border, as well as the rights of UK and EU citizens living cross-border.

Phase two ran until mid-November 2018 and focused on the future relationship between the UK and the EU. As part of this phase of negotiations, a transition period of 21 months was provisionally agreed, which is scheduled to start immediately after the leave date. This will give time for the UK to negotiate its future trading relationship with the EU.

The Chequers deal and a provisional agreement

The ‘Chequers plan’ – published on 12 July 2018 – was one of the most substantial and most complete plans for Britain’s exit from the EU at the time. It set out the relationship that the UK would seek with the EU following its departure from the union.

Although being approved by the British cabinet, the plan was rejected by the EU, with Michel Barnier, the EU’s chief negotiator, citing that the integrity of the EU single market is not negotiable and that the UK cannot ‘cherry pick’ the parts of the single market it likes. The single market is reliant on ‘four freedoms’: the free movement of goods, people, services and capital. The Chequers agreement only made concessions for the free movement of goods, which prompted Barnier’s comments.

The major sticking point was how the border between Northern Ireland and Ireland would work in practice, particularly if the two sides were unable to agree a workable trade deal during the transition phase. This is because the EU is unable to accept a soft border with a country that has different customs arrangements.

In November 2018, the two sides agreed a deal which would see the UK as a whole remain in a joint ‘customs territory’ with the EU until an alternative trade deal could be reached. However, it remains to be seen if Theresa May can win a commons’ majority for this deal, with critics claiming that such an arrangement will hand control of the UK’s trade to a foreign power.

Theresa May's draft deal and cabinet's approval

After many months of negotiation, Theresa May finally put a draft deal – a successor to the failed Chequers agreement – to her cabinet in November 2018. The new deal could be a step towards a soft Brexit, as it would mean that the UK has a plan in place for trade during the transition period, the Irish border, the rights of UK and EU citizens as well as other topics that have led the last few months of heated debate.

The prime minister declared that the cabinet had accepted the deal ‘collectively’ following around five hours of discussions on 14 November 2018. However, this terminology implied that the decision was not unanimous, with reports later suggesting that up to ten ministers had offered criticism of the prime minister’s plan. Several cabinet members resigned immediately, including Brexit Secretary Dominic Raab. Many other MPs have also expressed concerns over the proposed deal.

On 25 November 2018, a summit of EU leaders agreed to the prime minister’s deal. After the announcement, European Commission President Jean-Claude Juncker stated that the decision was ‘not a moment of jubilation but a moment of deep sadness’ in light of Britain’s departure.

Delayed Commons vote

On 10 December 2018, one day before the House of Commons was set to vote on the prime minister’s deal, Theresa May decided to postpone the vote in lieu of serious opposition from both sides of the aisle and speculation the deal would be rejected by the House.

The prime minister promised to return to Brussels to seek assurances from EU leaders on certain aspects of her deal – particularly with regard to clarification on the Irish backstop and whether the UK would be tied indefinitely to a customs union with the EU.

Vote of confidence in Theresa May

On 12 December, a vote of confidence in Prime Minister Theresa May was brought forward by her own party. The vote saw 117 Conservative MPs move against her, but she prevailed with 200 voting in her favour. Now, the prime minster is exempt from challenges from within her own party until December 2019, but she could still face a motion of no confidence from the House of Commons, should a majority of MPs back the idea.

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