Morgan Stanley has said there is a "modest" chance the UK will not exit the European Union in 2019 — and warned that the terms of any Brexit deal could depend on a new government in Westminster.

In a 29-page report, economists and strategists at the Wall Street bank wrote that the UK's ruling Conservative Party's failure to secure a parliamentary majority at the June general election had resulted in a softening of the country's views on Brexit over the summer months.