Brexit won't be solved by the end of October and the European Union (EU) will need to grant yet another deadline, according to a CNBC survey of senior financial executives in boardrooms sited around the world.
After missing an end of March exit date, Britain and Northern Ireland are now set to leave the EU on October 31, but the withdrawal agreement has not yet been approved by U.K. lawmakers in London.
Representatives from the ruling Conservatives and the main opposition Labour are currently in talks to see if a cross-party deal can break a deadlock which has brought the process to a halt. Within both parties there are deep divides over any joint plan, with a growing chorus calling for a second "confirmatory" referendum on any deal.
The CNBC Global CFO Council represents some of the largest public and private companies in the world, collectively managing nearly $5 trillion in market value.
According to the latest CFO Council quarterly survey, published Tuesday, 35.6% of chief financial officers (CFOs) now see yet another extension to the Brexit deadline as the most probable option. Exactly 20% percent of respondents think Britain will hold another referendum while 26.7% think the country will leave on the October date with a deal in place.
Just 2.2% of those asked believe that Brexit will happen at the end of October with no deal whatsoever. That marks an enormous shift in sentiment from February this year, when 40.7% of chief financial officers thought "no deal" was the most probable option
When broken down into regions, the chances of a second referendum was most pronounced by executives based in Asia with 60% percent of respondents believing that the U.K. would need to go back to the polls in order to finalize the Brexit outcome.
By comparison only 10% of U.S. based CFOs and 6.7% of EMEA executives predicted another referendum would be needed.
The council's global economic outlook offers a quarterly view for different countries and regions around the globe. This quarter revealed that the U.K. was the only one of 11 areas seen as "declining." All other areas were rated as "stable," except for the United States which was upgraded to "improving."
To other questions asked, 25.9% of respondents said U.S. trade policy was the biggest external risk factor to the success of their businesses. That figure far exceed a cyberattack (7.9%) and Brexit (5.5%) as the next two biggest fears.
The results were collated prior to a fresh tariff threat from President Donald Trump on goods produced and exported by the world's second biggest economy, China.
Trump said in a tweet Sunday afternoon that the current 10% levies on $200 billion worth of Chinese goods will rise to 25% on Friday. He also threatened to impose 25% tariffs on an additional $325 billion of Chinese goods "shortly."
Taking into account that the Trump bombshell was as yet unknown to the CFOs, some of the feedback suggested a more bullish outlook for markets in 2019. For stocks, 68.9% expect the Dow Jones Industrial Average will rise above 27,000 this year. That percentage more than doubled from the first quarter survey when just one in three asked were as bullish.
Most CFOs around the world also stated that interest rates are "about right". That answer was particularly pronounced in the United States where 90% agreed with current levels of borrowing.
More than two-thirds (68.9%) of CFOs surveyed predict no cuts or hike from the U.S. Federal Reserve in 2019 while 22.2% forecast one hike this year.
(Note: 45 of the 124 current members of the CNBC Global CFO Council responded to this quarter's survey, including 20 North American-based members, 15 EMEA-based members and 10 APAC-based members. The survey was conducted from Apr. 23–30, 2019.)
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