The mantra within the British government as it prepares tohammer out the terms of its break-up with the European Union isthat no deal is better than a bad deal.

Walking away with no regime for 230 billion pounds ($287billion) of annual exports to the bloc and the 3.3 millionEuropeans in the U.K would be “perfectly OK,” says ForeignSecretary Boris Johnson. Not “frightening” at all, says Brexit czarDavid Davis.

But analysts are painting an entirely different picture of anoutcome they view as increasingly plausible: U.K. Prime MinisterTheresa May balking at the EU's demands or giving up on getting thesweeping trade accord she wants. And a collapse in the two-yeartalks, which May is set to trigger next week, would unleash costsand regulations that stand to damage Britain far more than theEU.