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In this note we explain in detail why we think the risk of a no-deal Brexit is much larger than most commentators and financial-market actors believe. Over the last couple of days we noted a series of misleading comments from journalists and politicians, who are either ignorant about the legal procedures - Article 50 and the Fixed-Term Parliaments Act - or obfuscating. The key issue will be how these procedures will interact with the politics. 

We can never emphasise enough that the reason why the UK did not leave the EU without a deal on March 31 was Theresa May's reluctance. It was not the House of Commons. The role of the prime minister will remain critical because of the way Article 50 has framed the withdrawal process. A no-deal Brexit cannot be stopped by parliament except through ratification of a withdrawal treaty or outright Brexit revocation. The UK parliament has rejected both, which is why no-deal remains the default position, not only theoretically, but actually.

What about a vote of confidence? Under the FTPA, the leader of the opposition can call a vote of no confidence. If successful, that would trigger either a general election or the election of another prime minister. The latter is perhaps the Remainers' best hope. MPs could, for example, vote in favour of Dominic Grieve as prime minister with a limited mandate to ask the European Council for an extension, and to legislate for a second referendum or else trigger the FTPA provisions for an election. That would require an astonishing degree of self-sacrifice by Jeremy Corbyn.

If that doesn't happen - and we don't think it will - the no-confidence procedure is likely to be self-defeating. Any Tory MPs who vote against their own party leader will be deselected. The eleven MPs from Change UK would also lose their seats. Their best hope would be to merge with the LibDems, but it is not clear that this will happen, or that it will happen in time.

And then consider the FTPA timetable. The new Tory leader will be in place by mid/late July. The UK parliament will be in recess from 20 July until 5 September. When MPs come back from the holidays, it could be already too late. 

If, say, they vote on a confidence motion on September 10 and the motion passes, there would be a period of 14 days until parliament is dissolved and new elections are called. In that period the prime minister remains in office, but parliament is dissolved. The Tory party conference will take place from Sep 29-Oct 2 and would coincide with the beginning of the general election campaign. The newly elected prime minister would come under massive pressure by the conference to deliver Brexit on time. And if he or she believed that a no-deal Brexit would be less suicidal than asking for an extension, there is nothing parliament could do because it would already have been dissolved. 

So, when considering the question of a no-deal Brexit, we have to look at how the procedural timings and the politics are likely to interact. The key variable in all of this is who the next prime minister will be, and how determined they will be to accept no-deal. If they hesitate like Theresa May, Brexit will be dragged out. If they want a no-deal Brexit, they can have it.

We would also urge caution against false security from opinion polls. We noted a poll yesterday in which Labour, Conservatives, Brexit Party and LibDems are all around 20% - a mind-boggling combination in a first-past-the-post electoral system. What will be decisive in the upcoming general election is not the absolute number of Brexit vs Remain voters, but the marginal distribution across seats and the willingness of the various camps to co-operate. Only a fool would extrapolate from the European election results, and conclude that the Tories must at all costs avoid an election this year. 

We agree with the pollster John Curtice that delivering on Brexit is the singular key variable for Tory success of failure. If they deliver Brexit, we would not rule out that their support will surge. The certain road to perdition for the Tories is to agree another long Brexit extension, and for the Brexit Party to develop an effective national network of candidates in time for the regularly-scheduled elections in 2022. 

We noted before that Annegret Kramp-Karrenbauer made a stupid mistake when she published a European manifesto asking France to give up its nuclear arsenal, its UN Security Council seat and Strasbourg as one of the seats of the European Parliament. Or when she poked fun at trans-gender toilets during the carnival season. 

The effects were to display her deep ignorance of European politics, and to remind President Emmanuel Macron that Germany is ultimately not to be trusted. We were not clear at that time whether this was merely a slip. Helmut Kohl slipped up a few times in his early days but, when he did, he apologised and moved on. So did Angela Merkel, when she once remarked that France had structurally low productivity growth and was reminded by Jacques Chirac that French productivity growth exceeded Germany's. 

With AKK we see a rather different pattern. Her latest pearl of wisdom was a series of comments on regulating opinions by so-called influencers on social networks. As with her Europe paper or her toilet comments, she hasn’t thought this through and hadn't talked to anybody beforehand. 

And, unlike Merkel and Kohl, she keeps digging herself deeper and deeper into her holes. After the furore of her initial remarks, she doubled down with this:

So, she is now saying that freedom of opinion is ok, but not in elections. 

It is too early to make any forecasts about her future. We discount the reports that Merkel is beginning to distance herself. What we know for a fact is that AKK is by far the most inexperienced politician ever to be leader of a large German party. The learning curve is very steep. If what we have observed is a character flaw, she will be in considerable trouble.