Goldman Sachs raises 'no deal' Brexit chances after Johnson election

FILE PHOTO - European Union and British flags flutter in front of the chancellery ahead of a visit of British Prime Minister Theresa May in Berlin, Germany, April 9, 2019. REUTERS/Hannibal Hanschke

LONDON (Reuters) - Goldman Sachs on Tuesday raised its estimate of the likelihood Britain leaves the European Union without a deal to 20% from 15%, saying the “hurdle” to stop a hard Brexit will be higher following the election of Boris Johnson as Prime Minister.

Johnson was elected as leader of Britain’s governing Conservative Party and the next prime minister, tasked with following through on his “do-or-die” pledge to deliver Brexit in just over three months time.

“There will be less tolerance for another long Article 50 extension, with patience wearing thin in both Westminster and Brussels,” Goldman Sachs analysts wrote in a note.

The bank said it now sees chances of “no Brexit” at 35% versus 40% earlier. It however kept the odds on a negotiated Brexit deal unchanged at 45%.

Reporting by Thyagaraju Adinarayan; editing by Josephine Mason