James Smith, developed markets economist at ING, suggests that with the October 31 deadline no longer likely to be met, the EU will now almost certainly go ahead and authorise an extension to the Article 50 period.

“While France has previously voiced doubts over granting more time, most believe that President Macron is unlikely to ultimately block another extension. Exactly what form this will take is still uncertain, but most believe Brussels could go for another so-called 'flextension'. The latest reports suggest this could set a new Brexit date in January or February 2020, but crucially allow that deadline to be brought forward if a deal is ratified by the UK Parliament. While PM Johnson has indicated he wouldn't accept a 3 or 4-month extension, the terms of the 'Benn Bill' mean he has little choice but to accept unless Parliament says otherwise.”