Developments and scenarios ahead: The Brexit deal defeat in Parliament was expected, but the size of the loss was not – the result of 432 votes against versus 202 for was quite a surprise. In light of the larger-than-expected scale of the defeat, we have revised upward the probability of a no-deal Brexit (20% vs. 15% previously).

Investment views: Financial markets have absorbed the result quite smoothly, signalling that the result from the UK parliament had largely been anticipated and priced in. However, as uncertainty around Brexit’s potential outcomes remains high, we will continue to be cautious on sterling and gilts until there is greater clarity.