Consensus among many in the UK, and from both sides of the Brexit argument, is that unwinding British membership has nothing to do with political will but that it might yet be brought its knees by the sheer technical challenge. 

I lunched yesterday with a former British diplomat who spent much of his embassy time in the trade department. After a career in the Foreign and Commonwealth Office he is not one to make rash and unconsidered statements although he too is part of a growing group of people in this country that believes Brexit might yet founder when the divorce process becomes simply too complicated to be executed. A patch here, a patch there, the odd bridging agreement and a bucket load of postponements and the withdrawal process could find itself spun on indefinitely. 

Don’t get me wrong; I’m not saying that this is the most probable of outcomes but it is beginning to emerge as a distinct possibility…. not that anybody either close to or actually in government would dare say anything to that effect.

Eoin Treacy's view

The UK government is in something of a bind. It has a reduced majority and Prime Minister May has had to resort to appealing to the good nature of her bitter political rivals in other parties for support to get her through the Brexit negotiations.  More than anything else that displays how weak a hand she is playing after the election. 

The UK has to go into the negotiations with the credible threat of dissolving the talks but when members of the negotiating team have stated they are not actively planning for such an outcome the gambit is weakened. Against what is viewed as a weak hand by the Europeans they have been intransigent in their demands. Without some display of compromise that will only increase the potential for no deal. 

The reality is the UK has a strong hand but only if it chooses to use it. Implementing the kind of energy, and free market taxation, trade, regulatory and banking rules that would make it truly competitive are almost as Herculean tasks as Brexit itself. 

With David Davis already stating practical implementation of any agreement on a customs union could last beyond 2019 there is a real possibility Brexit could turn into a rather prolonged affair. In fact, kicking the problem down the road is one of the most effective policy tools EU politicians have if the actions of the last decade are anything to go by. Regulatory and political obfuscation is what ensures the EU has grown to the size it has because it allows rules to be implemented when required but ignored when needed. Italy’s bank bailouts being a prime example. 

The Euro broke out against the Pound today to post a new high for the year and a clear downward dynamic would be required to question medium-term scope for additional upside.