And any attempts to replace Mrs May run the risk of having a knock-on effect on the value of the pound, another has warned. Mrs May today told MPs it is their “national duty” to pass a Brexit deal after withdrawal from the EU was again pushed back. Addressing the Commons after the EU agreed the six-month Brexit, she said Parliament needed to come together for the national good.

May might hang on for longer, but her options continue to dwindle

Christian Schulz

But Citigroup’s Christian Schulz was just one of those to voice his scepticism.

Mr Schulz suggested with an “awkward Brexit extension” and local and European elections ahead, and Labour “unlikely” to help her find a Brexit compromise, “May might hang on for longer, but her options continue to dwindle”.

He added: “A snap general election remains a logical step to restart the UK Brexit process, even if it doesn’t guarantee a breakthrough.

“But the short extension may diminish the appetite for a vote somewhat for now, especially as the Conservatives might have to choose a new leader first.

“The UK’s choice becomes more polarised between no deal and no Brexit, making a second referendum ultimately more likely”

Goldman Sachs’s Jari Stehn was in broad agreement, saying: “A six-month delay to Brexit mitigates the risk of a disorderly departure, but it also reduces the incentive for MPs to compromise.

“A long extension also increases the likelihood of a snap general election.”

Mr Stehn put the chances of a no deal Brexit at 10 percent, with delayed ratification of a modified Brexit deal at 50 percent, and a confirmatory second referendum with no Brexit at all at 40 percent.

CMC Markets, Michael Hewson said Mrs May’s attempts to make the case to Brexiteers that the UK faced six more months in the EU was “not likely to go down well, which could well increase internal party manoeuvres to replace her”.

There are also implications for the UK’s currency.

London Capital Group’s Jasper Lawler said: “The pound is starting to look rather numb to all the Brexit drama.”

However, he said: “The resilience that we are seeing in the pound as a no-deal Brexit is avoided (again) may not last for long. 

“Whilst we expect the floor at $1.30 to hold for the time being, movements in Westminster to remove May could see that swiftly broken.”

DeVere Group’s Nigel Green said: “Investors are advised to now be on the watch for this relief rally in sterling, UK stocks, and also a mini spurt in economic activity in the UK, as delayed household and business spending takes place.

“In the meantime, this medium-length extension doesn’t change the fundamentals significantly. 

“What businesses in the UK, the EU, and around the world that trade internationally need and want is decision, not further fudging.”

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