The breakdown of EU-UK negotiations before the EU’s October summit, long considered the deadline to reach consensus on a withdrawal agreement, compresses the UK’s timetable before its automatic exit from the EU on 29 March 2019. The shaky compromises in the UK’s negotiating position are opposed by many Conservative MPs and rejected by European leaders. Meanwhile, the tension between Theresa May’s red lines and the imperative to prevent a hard border with Ireland provoked the Democratic Unionist Party (DUP) to threaten to withdraw its support for the government’s agenda.

The DUP considers any divergence from the mainland as an existential threat to the union, while Conservative MPs are similarly wary of special status for Northern Ireland. The EU’s “backstop” proposal, which would effectively leave Northern Ireland in the single market and customs union if no deal is reached, is anathema to the DUP. The governance crisis in Northern Ireland’s Stormont Assembly , catalysed partly by Brexit, raises the stakes further. In the short term, an extended political impasse in Brussels, London or Stormont increases the risk of a disruptive exit without a deal.

Phillip Hammond’s breezy declaration that blockchain might solve these thorny issues underlined the enduring lack of clarity over the details of the withdrawal or even the outlines of the UK’s future relationship with the EU. This means that the transition period will be consumed by negotiations and political jockeying over the details of the final settlement, extending regulatory and political volatility into the 2020s. In addition to the burden of costly no-deal contingency planning for businesses, this uncertainty will continue to weigh on the UK economy through reduced investment, lower business confidence and increased inflation. Concurrently, the prospect of lengthy trade negotiations with the rest of the world suggests that this state of flux could become the new normal for the UK.