LONDON (Reuters) – Goldman Sachs cut its estimate of the likelihood Britain leaves the European Union without a deal on Friday after Prime Minister Theresa May embarked on further cross-party talks to break a deadlock over how, when, and even whether Brexit would happen.
Economists at the U.S. bank upped their chances of a modified version of the current Brexit deal agreed with the EU passing to 50 percent from 45 percent.
The economists’ central scenario was still for Britain to leave the European Union “in an orderly fashion” before European parliamentary elections in May.
“Outside our central scenario, we think the risks are skewed decisively in the direction of a longer Article 50 extension and a softer Brexit end-state than originally envisaged by Prime Minister May,” wrote GS economists.
They kept the probability of Brexit being overturned unchanged, at 40 percent.
“Wrapping any negotiated exit deal in a confirmatory second referendum may well be seen by a majority of MPs as an appealing ameliorative to the stark divisions running through the House of Commons,” they said.
(Reporting by Helen Reid, Editing by Thyagaraju Adinarayan)