There's a real chance that Britain will hold a second referendum on leaving the European Union next year, if public opinion continues to shift against Brexit, Japanese bank Nomura believes.
Writing earlier in December, Nomura identified a second referendum as one of its 10 possible "grey swan" events for 2018. These are unlikely but impactful scenarios that could have a material effect on markets next year, outside of the more widely discussed possibilities such as the Italian election and Donald Trump being impeached.
Nomura's argument for a second referendum focuses around the fact that close to three quarters of all MPs backed remaining in the EU last summer.
"Parliamentary mathematics is the key here. Around 75% of MPs (including a slim majority of Conservative ones) are pro Remain," Jordan Rochester and Andy Chaytor wrote.
"So why are they pushing through Brexit legislation? They are enacting the will of the people as set out in the 2016 referendum. Of course, the will of the people can change. Over recent months we have seen a slim majority in the polls saying in hindsight it was wrong for Britain to vote to leave the EU.
"If this trend continues and that slim majority becomes a commanding one this may embolden Remain MPs on all sides of the house to push for a second referendum, perhaps on the outline of the actual deal the UK agrees with the EU." [...]
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