A leading global financial institution has warned the threat of a no-deal Brexit is increasing as Theresa May struggles to steer her Withdrawal Agreement through Parliament.
US investment bank JPMorgan claimed the possibility of no-deal had increased to 25 per cent from 15 per cent with the PM unlikely to get enough backing from MPs for her controversial deal.
The warning was based on former Foreign Secretary Boris Johnson taking over the Tory leadership from Theresa May, followed by a General Election and then another delay to Britain's exit to the end of the year.
JPMorgan also claimed that a further extension Article 50 was possible and sharply cut the probability of an exit on the terms of Theresa May's Withdrawal Agreement to 15 per cent from 35 per cent.
The bank's Malcolm Barr, in a research note called: "Brexit: Time to be afraid, as 'no deal' probability rises", said its predictions were based on Boris Johnson entering 10 Downing Street during early September.
He said: "Boris Johnson becomes PM in early September on a 'no deal if we have to' platform.
"The EU refuses his central objective of removing the backstop from the Withdrawal Agreement. The Commons begins the process of legislating to force Johnson to seek an Article 50 extension, and Johnson calls a general election seeking a mandate for his approach.
"The UK and EU agree to extend Article 50 to end-December to allow time for the general election to take place and for discussions to follow it," the note added.
The current deadline to leave is October 31.
Theresa May will face hostile MPs as she sets out her latest Brexit plan in the Commons on Wednesday.
Her new 10-point compromise has already been dismissed by Labour, the DUP and Tory Brexiteers.
The last-ditch attempt to shore up support included offering a vote on whether to hold a second referendum, as well as a choice over the UK's future customs arrangements.
