Is Boris Bolting?

Prime Minister Theresa May’s attempt to silence Foreign Secretary Boris Johnson in the Brexit debate backfired.

Hours after May rebuked her top diplomat for freelancing, and insisted she ran a government that backed her, Johnson openly discussed the divorce with the European Union and left open the possibility he might quit in protest at May’s handling of it.

Amid his concerns are potential payments into the European Union’s budget and the length of a transition. Chancellor of the Exchequer Philip Hammond is among those pushing a softer approach and there is speculation May will use Friday’s speech in Florence to pledge to pay money to Brussels in exchange for a smooth withdrawal.

Asked if he was going to resign, Johnson replied: “I think, if I may say, you may be barking slightly up the wrong tree.” But then he went on to discuss what life would be like once he had left his job: “When the burden of office is lifted from my shoulders, I will of course look back with great pride on my time doing all sorts of things.”

May had earlier said “this government is driven from the front, and we’re all going to the same destination. Look, Boris is Boris. I am clear what the government is doing and what the Cabinet is agreed on.”

The strained relationship has the potential to become explosive at a critical time for the Brexit talks and could damage both May and Johnson as they spend time together this week at the United Nations.

May’s loss of a parliamentary majority opened her to strife within her government and she needs to decide if she can afford to let Johnson go or if she needs his stamp of approval for her Brexit strategy. For his part, Johnson could blow his chance of succeeding her if his troublemaking incurs the wrath of colleagues and he is seen to be instrumental in undermining May or even pushing her out.

In another turbulent period for British politics:

The Times reported May will hold a Cabinet meeting on Thursday in a bid to bind colleagues into her Brexit vision

The Sun said Johnson has told friends he believes Brexit negotiations will fail and end up with May being humiliated

Dominic Cummings, the campaign director of Vote Leave, said the government’s negotiation strategy was a “shambles”

Johnson’s father, Stanley, told Sky News that his son “would be happy happy happy to walk away from the whole thing, if indeed that’s what he had to do”

May reshuffled her team of top Brexit negotiators with Oliver Robbins leaving his post as the leading official in the Brexit Department to focus full time on the negotiations from the premier’s office

The Institute for Fiscal Studies added its voice to the criticism of Johnson’s £350-million claim in a letter to the Times, saying Brexit will create a net fiscal loss.

— Simon Kennedy

Brexit Latest

Florence Forecasts | Mujtaba Rahman of the Eurasia Group predicted May will use her speech to say she will pay into the EU budget for a transitional period that lasts two years. But Carsten Nickel of Teneo Intelligence said May is unlikely to say enough to persuade the EU to open trade talks next month. The European Policy Centre’s Fabian Zuleeg said the EU “must seriously prepare” for no deal. Open Europe’s Henry Newman wrote on ConservativeHome that the problem was “the government has not yet decided what sort of country we ought to be after Brexit.”

Inflation Warning | Brexit, which prompted the Bank of England to cut interest rates for the first time in seven years in 2016, is now pushing in the other direction. Governor Mark Carney said on Monday that while the decision to leave the EU has slowed growth, it has also cut the economy’s potential. That reduced speed limit increases the chance of overheating and partly explains why the bank now says it may need to raise rates soon, he said.

Canada | Canadian Prime Minister Justin Trudeau told May in Ottawa that he was hoping for a “seamless transition” in ties between their countries after Brexit. The U.K. government said it and Trudeau’s administration agreed that Canada’s trade deal with the EU could be used as the base for a new pact with Britain.

Luxury Manufacturers | Aston Martin said the luxury sports-car maker wants some clarity on the U.K. government’s Brexit negotiations within six months as it seeks to avoid trade tariffs. Meanwhile, Marco Gobbetti, the new chief executive of the U.K. fashion company Burberry, said he is “powering ahead” through Brexit and that the company has benefited from sterling’s decline.

Irish Warning | Irish Foreign Minister Simon Coveney said the U.K. had made a “huge mistake” in its Brexit planning and “needs to move from its current position” to push talks on its departure from the EU ahead.

Liberal Democrats | Vince Cable, the leader of the anti-Brexit Liberal Democrats, will use his party’s conference on Tuesday to urge “political adults” from the major political parties to unite to ensure the U.K. remains in the single market and customs union. Former leader Paddy Ashdown said Brexit won’t happen because the government is incapable of delivering “anything,” the Press Association reported.

Peer to Peer | Uncertainty around Brexit may be mounting, but that isn’t slowing down some foreign investors from betting on Britain’s top peer-to-peer lenders. Varengold Bank, a Hamburg-based private banking firm, will provide £45 million in annual funding for loans to small businesses arranged by MarketInvoice. But Britain’s impending exit from the EU has put a “question mark” over the country’s attractiveness to fintech firms, according to the head of France’s biggest peer-to-peer lender, Younited Credit.

On the Markets | Investors are under-estimating U.K. political risk and the pound’s recent bounce is vulnerable to reversals on the road to Brexit, Bloomberg Gadfly’s Lionel Laurent argues.