Betting on politics: deal or no deal

Matthew Partridge looks at the bookies' odds on the UK leaving the EU with no deal.

Nigel Farage © Leon Neal/Getty Images

(Image credit: Nigel Farage © Leon Neal/Getty Images)

It almost seems as if there have been more Brexit-related twists and turns in the last month than there have been in the entire period since the June 2016 referendum. Nothing illustrates this better than the perceived chance of a no-deal Brexit. Just a few weeks ago, many people believed that it was extremely likely. Now, thanks to the passage of the Benn bill through Parliament, instructing the government to ask for an extension to Article 50 unless a deal acceptable to Parliament can be passed through the House of Commons, it looks very unlikely.

These shifting perceptions have been reflected in Betfair's market on a no-deal scenario. At one point the implied chances of a no-deal Brexit were nearly 50%. They then plunged to a low of around 15%. With a total of £1.65m now matched on the outcome, punters clearly think that the UK leaving the EU without a deal is very unlikely, but still not impossible, and you can get 5.3 (18.9%) on a no-deal Brexit and 1.23 (81.3%) against. Nigel Farage no doubt has other ideas.

The lesson of the last three and a half years is that you can never, ever, rule anything out, but I think that the chances of a no-deal Brexit this year are less than 5%. So I'd advise you to take Betfair's 1.23 against the possibility of no-deal Brexit in 2019. As the rules of the bet make clear, this bet pays off if Britain fails to leave the EU before the end of the year or if a Withdrawal Agreement is agreed (and ratified) before Britain leaves.

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Dr Matthew Partridge

Matthew graduated from the University of Durham in 2004; he then gained an MSc, followed by a PhD at the London School of Economics.

He has previously written for a wide range of publications, including the Guardian and the Economist, and also helped to run a newsletter on terrorism. He has spent time at Lehman Brothers, Citigroup and the consultancy Lombard Street Research.

Matthew is the author of Superinvestors: Lessons from the greatest investors in history, published by Harriman House, which has been translated into several languages. His second book, Investing Explained: The Accessible Guide to Building an Investment Portfolio, is published by Kogan Page.

As senior writer, he writes the shares and politics & economics pages, as well as weekly Blowing It and Great Frauds in History columns He also writes a fortnightly reviews page and trading tips, as well as regular cover stories and multi-page investment focus features.

Follow Matthew on Twitter: @DrMatthewPartri