-On the verge of no-deal Brexit

Prime minister Boris Johnson’s stance that the U.K. “will leave the EU, deal or no deal, come what may on Oct. 31” stands completely at odds with the law, specifically the Benn Act, as it is known, which dictates that the U.K. government has to apply for an extension if a deal has not been reached by Oct. 31.  Now the question is whether Johnson will ask for an extension or not, and if not, what will be the legal consequences be?

The government lost the case that was submitted to the Scottish courts over the legality of the suspension of Parliament, and now Downing Street needs to comply with the law as it stands. 

It seems that not only are Johnson’s negotiating tactics failing but he will be unable to follow through with a core repeated pledge to the public that he would take the U.K. out of the EU on Oct. 31. He now has less than 30 days to find a way out of this political conundrum. 

Johnson’s plans for Brexit appear to be unraveling, as negotiations with the EU on a new deal are faltering, while court papers oblige him to seek a deal extension beyond Oct. 31. Johnson’s proposal, meant to form the basis of a deal to leave the EU, centers on a change to the Northern Ireland backstop arrangement, as it had been previously negotiated. The British government is now suggesting that Northern Ireland will leave the customs union territory, alongside the rest of U.K., but stay within a single market for goods and agriculture – an arrangement that would be reviewed every four years.

Though the EU has not dismissed the suggestion out of hand, EU sources claim that such a proposal cannot form the basis of a new deal, because of the implications for the Northern Ireland peace process, where the idea of bringing back a hard border is very controversial. 

The failing negotiations with the EU come amid new revelations that Johnson had made representations to the Scottish courts that he would seek an extension from the EU beyond Oct. 31, despite consistently making statements to the contrary to both Parliament and the public.

Businesses are greatly concerned, as the U.K.'s economy may have tipped into recession.

The IHS Markit/CPS purchasing managers' index for services fell to a six-month low of 49.5 in September. The 50-point level divides growth from expansion. Combined with even weaker manufacturing and construction Purchasing Managers' Indexes (PMI) earlier this week, September's all-sector PMI sank to 48.8 from 49.7.